Summary
The federal flood insurance program in the United States, known as the National Flood Insurance Program (NFIP), is at risk of expiring on September 30 unless Congress acts to extend it. This program, managed by FEMA, provides crucial flood coverage to millions of Americans, but if it lapses, it could create significant problems for homeowners and businesses as disaster season peaks.
Key Facts
- The NFIP offers $1.3 trillion in flood insurance coverage to about 4.7 million policyholders.
- Flooding is a frequent and costly natural disaster in the U.S., with costs ranging from $179.8 to $496 billion annually.
- Only 4% of homeowners have flood insurance, though 99% of U.S. counties have experienced flooding since 1999.
- NFIP covers up to $250,000 for homes and $500,000 for nonresidential buildings but only partially covers post-disaster costs.
- If the NFIP expires, new policies won't be issued, and existing policies won't renew after their one-year term ends.
- Real estate transactions in flood-prone areas may halt if the program lapses.
- The NFIP's borrowing limit from the U.S. Treasury will drop significantly, restricting its claim-paying capacity.
- The program has a current debt of over $22.5 billion, despite receiving a debt forgiveness of $16 billion in 2017.
