WASHINGTON — Congress is debating reauthorization of the National Flood Insurance Program as the program approaches its September 2026 expiration date carrying a $20 billion debt to the U.S. Treasury — a debt accumulated through repeated major flood events including Hurricanes Katrina, Sandy, Harvey, and Ian.
The NFIP provides flood insurance to approximately 4.7 million policyholders in more than 22,000 communities. Without reauthorization, the program would lapse, leaving millions of homeowners without flood coverage and halting real estate transactions in flood-prone areas that require flood insurance as a condition of federally backed mortgages.
FEMA's Risk Rating 2.0 methodology, implemented in 2021, has increased premiums for many policyholders in high-risk areas while reducing premiums for others. Congressional critics of Risk Rating 2.0 argue that the increases are driving policyholders out of the program, while supporters say the new rates more accurately reflect actual flood risk.
Competing reform proposals include expanding the private flood insurance market, creating a federal reinsurance backstop for private insurers, restructuring the NFIP's debt through a combination of premium increases and congressional appropriations, and creating means-tested premium subsidies for lower-income policyholders.
The restoration industry has a significant stake in NFIP reauthorization — flood insurance claims are a primary funding source for water damage restoration work. Industry organizations are urging Congress to reauthorize the program without a lapse and to maintain coverage levels that support full restoration of flood-damaged properties.
