National Flood Insurance Program (NFIP) Stops Writing New Policies Amidst Government Shutdown

The private flood insurance marketplace is surging this month due to the US government shutdown.

As long as the government remains shutdown, the National Flood Insurance Program (NFIP) cannot write new policies.

As reported by NPR, the NFIP stopped writing new policies on October 1 and cannot resume until it’s reauthorized by Congress.

Here’s how the official NFIP website explains the shutdown:

NOTICE: Due to the lapse in federal funding, portions of this website may not be updated and some non-disaster assistance transactions submitted via the website may not be processed or responded to until after appropriations are enacted.

New homebuyers are scrambling to navigate the situation, with some turning to the private marketplace to get the flood insurance coverage they need.

Some Lenders Require Flood Insurance to Get a Mortgage

The shutdown isn’t just a minor inconvenience. Per NPR, it’s forcing some buyers to postpone or cancel home sales.

Florida, for example, is America’s biggest flood insurance marketplace.

In many flood-prone regions of Florida, lenders require homebuyers to obtain flood coverage. Before getting a mortgage, you need to provide proof of flood insurance coverage to the lender. Many homeowners – particularly those in high-risk flood zones – rely on the NFIP for a smooth home buying process.

NPR highlighted a story from one homeowner who was days away from closing on a home, only to miss out because of the shutdown:

Days before closing on the sale of a home this month…[a Florida homebuyer] discovered he would need flood insurance. Unfortunately, because of the shutdown, the $700 annual flood policy he expected to purchase from the government program [the National Flood Insurance Program or NFIP] was no longer available.

That homeowner ultimately obtained coverage from the private marketplace, costing him around $1,200 per year (60% more per year than the NFIP) for flood insurance.

NFIP Shutdown Causes Private Flood Insurance Marketplace to Surge

The US government’s National Flood Insurance Program (NFIP) is the best-known flood insurance provider in the United States. However, homeowners can also buy coverage through private companies.

Private flood insurance policies appeared on the marketplace in 2019. Today, they account for a growing share of the overall flood insurance market.

During the government shutdown, the NFIP can’t write new policies, giving homeowners one option for new coverage: the private marketplace.

Private vs. Public Flood Insurance

What’s the difference between private flood insurance and public flood insurance from the NFIP?

There are pros and cons to either option:

The main advantage of the NFIP is that it provides affordable coverage in areas where private insurers are unable – or unwilling – to do business. The NFIP covers high-risk flood zones, for example, where homeowners and business owners would not typically be able to buy insurance.

On the other hand, homeowners and business owners in lower risk flood zones may get better rates through the private marketplace. Private flood insurance policies can also exceed the $250,000 coverage limit offered by the NFIP.

NPR highlights the story of Neptune, one of the largest private companies in the flood insurance marketplace. In an interview with NPR, Neptune CEO Trevor Burgess revealed his company uses artificial intelligence to analyze the risk of specific properties, making it easier to charge location-specific premiums.

Flood insurance may cost $12,000 at a high-risk property, for example, while a nearby property pays just $200 per year because of this lower risk. Other insurers price risk based on ZIP code or proximity to the coastline instead of property-specific factors, leading to an inefficient marketplace.

The private marketplace also has risks. After a major disaster, private insurers may face less accountability. NPR highlights the fallout from Hurricane Sandy, for example, where pressure from policyholders and elected officials forced the NFIP to reopen many claims. You may not see this accountability within the private sector. Politicians may be more willing to act against a government organization than a private business.

How to Buy Flood Insurance During the Government Shutdown

The NFIP will be unable to write new policies until Congress authorizes new funds to keep the government running.
If you are buying a home and need flood insurance, then you cannot buy flood insurance through the NFIP until Congress authorizes new funding.

You have two options:

• Option #1: Wait until the government shutdown is over and/or Congress authorizes funds for the NFIP. Then, the NFIP can write new flood insurance policies as normal through FloodSmart.gov or an NFIP-affiliated insurer.
• Option #2: Buy flood insurance from the private marketplace.

Homeowners with existing NFIP policies are also affected. The shutdown could impact your ability to make a claim and receive payment for a claim.

Sometimes, the private marketplace offers better coverage and lower premiums than the NFIP. Typically, however, the NFIP offers competitive rates in high-risk flood zones – like areas where lenders require you to buy flood insurance coverage.

To obtain flood insurance from the NFIP, visit FloodSmart.gov. As of mid-October 2025, however, the website acknowledges:

Due to the lapse in federal funding, this website [FloodSmart.gov] will not be actively managed.