The National Flood Insurance Program (NFIP) expired on Wednesday after Congress missed the federal budget deadline on October 1. This means no new federal flood insurance policies can be sold, and existing policies that expire will not be renewed for now.
Louisiana is among the states most affected by this pause, with about 419,000 NFIP policyholders, representing nine percent of all NFIP policies nationwide. The Louisiana Department of Insurance quickly issued guidance for these policyholders to help them understand what the lapse means.
If you currently have a flood insurance policy through NFIP, your coverage will continue until the end of your policy term. However, if your policy is up for renewal or you have a pending application, you need to check with your insurance agent to confirm whether your coverage will continue. The program does plan to handle existing claims with available funds, but if those funds run out, payments may be delayed until more resources become available.
This situation poses a challenge for property owners in designated high-risk areas, known as Special Flood Hazard Areas, especially if they need flood insurance to close on a home or business purchase. Without NFIP coverage available, some real estate deals might be stalled or canceled.
Fortunately, private flood insurance might be an option. Property owners can reach out to their insurance agents to explore flood insurance alternatives that meet federal requirements.
Louisiana Insurance Commissioner Tim Temple spoke about the issue at a recent Federal Emergency Management Agency (FEMA) Review Council meeting. He stressed the urgent need to update and improve the NFIP, saying the state deeply understands the damage floods and hurricanes can cause. He called the reform of FEMA and the NFIP “not just necessary—it is overdue.”
With Louisiana often hit hard by severe weather, many hope Congress will act quickly to restore the program and keep flood protection affordable and reliable for homeowners and businesses alike. Until then, residents are urged to stay in touch with their insurance agents and prepare for possible delays in coverage and claims processing.