Editorial: Congress needs to keep National Flood Insurance Program in business - Insurance News | InsuranceNewsNet

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October 2, 2025 Property and Casualty News
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Editorial: Congress needs to keep National Flood Insurance Program in business

Staff EditorialThe New Orleans Advocate

If there's one thing that Louisianans can take to the bank, it's that the most recent flood will not be the last.

So it would be really helpful if they could count on something else: reliable and available flood insurance.

Yet once again, the federal government, which writes the vast majority of flood policies in the U.S., isn't keeping up its end of the bargain. The government shutdown that began Wednesday also marked the expiration of the National Flood Insurance Program's authorization.

So what does this mean for the more than 400,000 Louisianans who rely on this coverage?

In the immediate term, current policies remain in effect. But new policies can't be written, existing policies up for renewal can't be renewed and real estate purchases in zones where lenders require flood coverage can't go through. And potentially, the expiration could limit the payment of claims.

If all this sounds familiar, it should.

Congress routinely lets the flood insurance program lapse, or comes close. During the past decade, it's passed no fewer than 33 short-term authorization extensions. One such extension was included in the short-term spending bill that has fallen victim to the larger partisan stalemate. Another, a standalone measure, is proposed but awaiting action.

These frequent extensions are largely the result of Congress kicking the can down the road as it contemplates the larger goal of reforming the program to make it less costly, more actuarially sound and simply more fair.

That it has largely failed on that front is telling, for charting a different path requires grappling with hard questions about how much and whether government insurance should subsidize those who live in areas prone to flooding, and how to discourage building in flood-prone areas without punishing longstanding communities where living with water is simply a fact of life.

The program's most recent reform, called Risk Rating 2.0, proved controversial and punishingly costly for many Louisiana homeowners. Some who are not required by lenders to carry coverage have dropped it, leaving them vulnerable to the next disaster and likely putting others on the hook for their recovery.

That said, there has been some isolated good news lately. Residents of unincorporated Jefferson Parish and Livingston Parish recently became eligible for rate cuts, as a result of local flood mitigation measures. Property owners in Youngsville could now qualify for a break too, since city officials were recently approved for the NFIP's voluntary community rating system.

But the bigger issues surrounding the flood insurance program's future remain, even as the Trump administration's deeply concerning talk of scaling back or eliminating FEMA, which runs the NFIP, raises new ones.

Still, none of that means that Congress can't minimize damage in the short run by extending the program's current provisions one more time. Or even better, it could extend them indefinitely, which would not preclude reform but would minimize disruption in the meantime.

That, at least, would keep Louisiana's ongoing insurance challenges from getting even worse.

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