As of October 1, the National Flood Insurance Program (NFIP) has officially expired following Congress’s failure to approve an extension, causing policy lapses during the peak of hurricane season and threatening to stall tens of thousands of real estate transactions across the country.
The program’s authorization ended alongside the federal fiscal deadline on September 30, as deep divisions in Congress over the budget left the NFIP in limbo. Without reauthorization, the Federal Emergency Management Agency (FEMA)—which manages the program—can no longer issue new policies or renew existing ones, though it will continue to pay out valid claims with whatever funds remain available.
Real Estate Closings at Risk Nationwide
According to the National Association of Realtors (NAR), the lapse in the NFIP will directly affect around 1,300 property sales per day, or roughly 40,000 closings per month. In a letter sent to Congress earlier this month, NAR called for a long-term NFIP renewal that includes critical updates such as better flood maps, investment in risk mitigation, and more accurate premium pricing. NAR data shows the program supports around 500,000 home sales each year.
Calls for Action Went Unanswered
Despite repeated warnings from lawmakers and insurance groups in the days leading up to the deadline, Congress did not act. New York Assemblywoman Pamela Hunter, president of the National Conference of Insurance Legislators (NCOIL), stressed the urgency of preventing a lapse, saying, “With hurricane season at its height, we cannot afford to leave communities unprotected.”
She added that while a permanent overhaul is badly needed, even a temporary fix would have protected families and businesses in the short term.
Jimi Grande, senior vice president at the National Association of Mutual Insurance Companies (NAMIC), warned before the deadline that allowing the NFIP to expire would be dangerous. On October 1, NAMIC President and CEO Neil Alldredge expressed frustration with Congress’s failure to act, saying, “With two months left in hurricane season, every day this program remains inactive puts more Americans at risk.”
He criticized the history of poor decision-making surrounding the NFIP, from outdated flood zone maps to subsidies that incentivize development in flood-prone regions. “Millions of Americans chose to protect themselves by purchasing flood insurance through NFIP. They shouldn’t be penalized because Congress can’t come to an agreement,” he said.
Industry Leaders Warn of Worsening Insurance Crisis
Other major voices in the insurance industry also sounded alarms. Sam Whitfield, senior vice president of federal government relations for the American Property Casualty Insurance Association (APCIA), urged lawmakers to move quickly, warning that home loans and purchases across the country could be disrupted. APCIA has long supported a long-term reauthorization of NFIP to provide consistency for policyholders and the housing market.
Lizzy Price of the Insurance Fairness Project added in an October 1 statement, “This lapse only adds pressure to an already strained insurance market made worse by climate change. When Congress cuts off programs like NFIP, communities end up paying the price.”
A History of Stopgap Measures and Funding Shortfalls
The NFIP has faced more than 30 short-term reauthorizations since 2017, with the most recent occurring in March 2025. That extension came just after FEMA borrowed $2 billion from the U.S. Treasury to help cover claims from Hurricanes Milton and Helene in 2024.
FEMA noted that the surge in claims from those storms had wiped out most of the NFIP’s available funds, which are largely generated through policyholder premiums. According to the Congressional Research Service, the NFIP had just $615 million in reserve as of January 25 to pay future claims.