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NFIP Flood Insurance At-Risk Pending Potential Government Shutdown

The National Flood Insurance Program (NFIP) is facing risks in reauthorization and coverage lapses amidst a potential government shutdown. The deadline for the reauthorization of the NFIP is on September 30th, and the reauthorization is dependent on the negotiations regarding federal spending. The negotiations on federal spending are not encouraging as compared to years past, meaning it’s important to pay attention and understand what a lapse in NFIP authorization would mean.

If a lapse of the NFIP were to occur, it would not impact claims filed prior to the lapse. However, should the program lapse, the NFIP cannot issue new policies. Anything billed prior to the lapse can be renewed once payment has been received within the grace period.

If you are in the process of buying a home, now is an important time to be extra mindful of whether the property is located within a flood zone. Buyers who purchase a property with a government-backed mortgage in a high-risk flood zone are required to have flood insurance. Should the NFIP expire, purchasers would need to look to private flood insurance options.

If you currently have a bound policy from the NFIP and need to submit a claim, that should not be affected if you have an assigned policy number. However, the processing might be slower as people are furloughed.

If you have questions or concerns regarding the NFIP reauthorization, or questions about flood policies in general, please call or text us today at (360) 514-9550. As independent agents, we are passionate about finding the best coverage for your unique situation and serving as your professional insurance advisor.