Governor urges insurance companies to continue coverage for those affected by federal shutdown

Gov. Andy Beshear is urging insurance companies to implement safeguards that ensure policyholders who are federal workers do not lose critical insurance coverage during the federal government shutdown.

"The federal shutdown is having real impacts across our country and our commonwealth," Beshear said. "As a state, we're doing what we can to support the more than 23,000 Kentucky families who are experiencing a loss of income through no fault of their own."

Department of Insurance (DOI) Commissioner Sharon P. Clark added, "These consumers should not have the additional burden of losing insurance coverage because they are not being paid and cannot pay their auto, homeowners, life or, in some cases, health insurance premiums."

Team Kentucky is asking all insurers to immediately implement the following protective measures for their policyholders who are federal employees:

Deferment on cancellations

Insurers should seek to postpone or withdraw termination notices occurring on or after Oct. 1, 2025, on any in-force policy due to nonpayment of premium for federal employees. Insurers are asked to continue coverage in cases of unpaid premium for at least 30 days or 30 days after the end of the federal shutdown, whichever is longer. If, following the end of the federal shutdown, an affected consumer indicates to an insurer that they have not yet received their guaranteed compensation for the period of the federal shutdown, the department requests that insurers continue coverage, even in cases of unpaid premiums, for at least an additional 30 days.

Time-period extension for payments

Insurers are permitted to extend payment time periods for affected consumers to pay premiums, co-payments, deductibles and other charges that, when extended, will be for the benefit of their customers. Such extensions should be for reasonable time periods that will not result in a financial hardship on consumers when the payments become due after the federal shutdown. Insurers may provide for recoupment of unpaid premiums from claims occurring during the forbearance period.

Time-period extension for repairs

If an affected consumer indicates to an insurer that repairs cannot be completed within the time required under any policy, the department requests that insurers provide consumers with an extension of at least 30 days to make such repairs, or such time as is necessary.

Kentuckians with a loss of compensation due to the shutdown who are threatened with policy cancellations can contact DOI for more information.

Additional Options for Flood Insurance

With the federal government shutdown, the National Flood Insurance Program stopped writing new policies as of Oct. 1, 2025. This could have a dramatic effect on prospective homeowners whose mortgage company requires flood insurance to complete the purchase of their new home.

To assist these buyers, DOI has compiled a list of surplus lines insurance companies that offer flood insurance coverage and a list of brokers who sell this insurance. Anyone in need of flood insurance can contact DOI's Consumer Protection Division for additional guidance.

For more information on any of these relief programs, contact DOI's Consumer Protection Division at 800-595-6053, by email at doi.consumercomplaints@ky.gov or visit insurance.ky.gov.