Federal flood insurance pause hurting Louisiana, Cassidy says

(The Center Square) — The prolonged government shutdown has disrupted the National Flood Insurance Program, leaving roughly half a million Louisiana policyholders in limbo and complicating property sales, U.S. Sen. Bill Cassidy said Friday.

The program, administered by the Federal Emergency Management Agency, has stopped writing policies and paused renewals of existing ones, a scenario Louisiana officials warned in September could hobble real estate transactions and weaken the government’s ability to pay claims if a major storm hits.

Cassidy, R-La., said the lapse in funding is freezing home closings and complicating policy renewals for existing customers. In a speech on the Senate floor, he acknowledged the federal flood program needs long-term reforms but said “shutting it down makes the problem worse, not better.”

“Every day the government is shut down gets worse for Americans in my state who are worried about flooding and losing everything,” Cassidy said. “Reopen the government. Restore certainty to the American people. Protect homes. Protect families. Protect livelihoods.”

Cassidy said he and Sen. John Kennedy, R-La., have filed two stopgap bills — one to extend the program “in the short term” and another for a full year of coverage— while they work on broader changes aimed at keeping premiums affordable and the program financially sustainable. He also previewed legislation that would automatically reauthorize it during any future lapses in government funding so shutdowns do not interrupt coverage.

“The American people want solutions,” Cassidy said. “They want flood insurance that protects their homes, families and livelihoods.”

The remarks extend months of pressure from Louisiana leaders to stabilize the program. Earlier warnings noted that repeated short-term extensions have created annual uncertainty for policyholders.

Consumer advocates have likewise cautioned that even brief lapses can ripple through housing markets and disaster response.

House Republicans from the Gulf Coast are advancing parallel efforts. Rep. Mike Ezell, R-Miss., introduced the National Flood Insurance Program Retroactive Renewal and Reauthorization Act to restore it and protect policyholders who planned to renew but were caught by the shutdown.

“As evidenced by the ongoing lapse of NFIP, a long-term reauthorization is necessary for sustainability of the program and affordability for its policyholders,” said Michael Hecht, president and CEO of Greater New Orleans, Inc., speaking for the Coalition for Sustainable Flood Insurance.

Hecht said the coalition’s analysis of FEMA data shows flood insurance premiums under Risk Rating 2.0 are “rising by over 100% on average and by at least 50% in 41 states,” adding that retroactive reauthorization would help keep cost-burdened households insured.