NFIP EXPIRATION OCTOBER 1, 2025
Recently, Proctor Loan Protector brought to your attention that the National Flood Insurance Program (NFIP) would expire September 30, 2025 if reauthorization was not passed by Congress.
The federal government began a full shutdown at midnight last night after lawmakers failed to reach an agreement to extend government funding. As a result, the NFIP expired effective 11:59 p.m. on September 30, 2025.
The expiration of the NFIP program does not affect your lender-placed flood insurance program with Proctor Loan Protector.
Proctor Loan Protector would like to draw attention to guidance previously issued by agencies that provides answers to frequently asked questions and entities’ responsibilities during a lapse in the NFIP. For complete details, please review the guidance below:
- FEMA: W-24020 Guidance on Potential Lapse in National Flood Insurance Program (NFIP) Authority (floodsmart.gov)
- Federal Agencies: Agencies Issue Statement on Financial Institutions Issuing Loans When National Flood Insurance Program is Unavailable
- Interagency Q&As Regarding Flood Insurance: Agencies Release Revised Interagency Questions and Answers Regarding Flood Insurance (occ.gov) – See Applicability 12
Based on the guidance referenced above, the following are some high-level changes as a result of the expiration:
- Write Your Own and NFIP direct agents cannot issue policies for new business or increase coverage if the application or request to increase is dated after 11:59 pm Eastern time on September 30, 2025. However, applications and requests to increase coverage dated prior to an expiration may be honored depending on the date the insurer receives the application/request, and whether policy premium was received before the applicable deadline.
- Renewal notices may not be issued during the expiration, but renewal offers prior to the expiration will be honored if the insurer receives the renewal premium within the applicable grace period or extension of time to pay the renewal premium.
- Existing NFIP policies will remain in effect until their expiration date (i.e., the renewal date plus a 30-day grace period), and claims will continue to be paid as long as FEMA has the funds on hand.
- The federal requirement to purchase flood insurance is suspended, which means it is up to lenders to decide whether to make loans in Special Flood Hazard Areas while NFIP insurance is not available. Lenders must continue to make flood determinations, provide timely, complete, and accurate notices to borrowers, and comply with other applicable requirements of the regulations. Upon reauthorization of the NFIP, lenders are expected to ensure that flood insurance will be purchased promptly for loans closed without flood insurance during the lapse.
- Private flood insurance backed by a source other than NFIP are not affected.
Proctor Loan Protector will continue to monitor this situation and provide updates as they are received.