Angie Childers

A partial U.S. government shutdown began at midnight on January 30, once again causing the National Flood Insurance Program (NFIP) to lapse. While lawmakers are expected to reach a short-term agreement more quickly than during past shutdowns, the pause in NFIP operations creates immediate challenges for insurance agents, brokers, and their policyholders.

As history has shown, even brief NFIP lapses can have outsized consequences — particularly for homebuyers, property owners, and businesses that need flood insurance to move forward with transactions or maintain adequate protection. Existing policies remain in force and claims can still be paid, but the program cannot issue new policies, renew expiring coverage, or process policy changes such as increases or endorsements.

For agents and brokers, this unpredictability makes one thing clear: relying solely on a federal program subject to political stalemates puts clients at risk.

“Private flood insurance offers meaningful advantages over the NFIP — broader coverage terms, greater flexibility, no waiting period, and no disruption tied to government shutdowns,” said Lauren Savage, President of TMH’s Private Flood Division. “Waiting until a lapse occurs can leave clients exposed and agents scrambling. Private flood coverage is not just an alternative, it’s a more resilient solution that aligns with today’s flood risk realities.”

Unlike the NFIP, private flood insurance is not impacted by government shutdowns. Beyond availability, private flood coverage offers meaningful advantages that many policyholders may not realize, including:

• No waiting period to bind coverage
• Higher building and contents limits than the NFIP
• No federal fees or co-insurance penalties
• Additional coverages not available through the NFIP, such as additional living expenses or loss of rents
• Special sub-limits for basements and enclosures
• More flexible deductible options
• Faster, more efficient claims handling

For agents, private flood allows you to help clients meet lender requirements quickly while often delivering broader, more comprehensive protection.

The NFIP will eventually be reauthorized, but the disruption is already here. With another lapse underway, now is the time for brokers and agents to proactively steer clients toward private flood insurance solutions that are available, flexible, and dependable.

When federal programs pause, protection shouldn’t.

The odds of another government shutdown at the end of the month may be decreasing, but flood insurance agents and brokers should have alternatives ready to go if Congress is unable to come to an agreement and the National Flood Insurance Program (NFIP) lapses again.

On November 12, 2025, the last — and longest government shutdown — ended after 43 days with the signing of a stopgap measure which retroactively reauthorized government programs including the NFIP through January 30. The legislation brought relief to home and business owners left in limbo if they needed to renew, procure or modify their NIFP-provided flood coverage during that six-week period.

While lawmakers passed an appropriations package on January 8 to shore up funding for a half-dozen departments and agencies, it will be a mad dash to meet the January 30 deadline. Representatives in both the House and Senate will need to agree on several more appropriations bills to avoid a shutdown — and another NFIP interruption.

Agents and brokers helping clients with flood renewals during this period of uncertainty should consider the merits of the private flood market, and coverage such as TMH₂O. Not only are private flood policies unaffected by government shutdowns, private flood offers broader coverage, greater flexibility, no waiting period, federal fees, or co-insurance penalties.

Learn about private flood benefits vs. the NFIP below, and click here to get appointed to quote, bind, and issue primary residential flood policies today.

President Trump ended the 43-day government shutdown on November 12, 2025 by signing the Continuing Appropriations Act (H.R. 5731), which retroactively reauthorizes the National Flood Insurance Program (NFIP) to October 1, 2025. This authorization extends through January 30, 2026.

While this extension brings relief to millions of homeowners and business owners, it is only a stopgap measure. If Congress fails to reach an agreement, policyholders could be in limbo once again — a fate that can be avoided by looking for coverage in the private flood market.

With this current reauthorization, NFIP insurers can:

• Issue policies effective as of the date applications and payments were received (subject to waiting periods).
• Process and pay claims for covered losses that occurred during the lapse, in accordance with the Standard Flood Insurance Policy (SFIP).

However, another NFIP interruption is possible. With less sophisticated mapping and modeling than is available in the private market, coupled with lapses and funding issues, your NFIP policyholders may be paying higher rates for less reliable flood coverage. Agents and brokers should educate their customers about these risks and the flood insurance options available in the private flood market. This is particularly important for clients whose policies are up for renewal in early 2026.

Private flood insurance offers broader coverage, greater flexibility, and no waiting period, federal fees or co-insurance penalties. However, it is important to assess each client’s flood needs and eligibility. Staying informed and proactive will help ensure clients are protected, regardless of future Congressional action.

Contact PrivateFloodSolution@tmhighland.com for more information.

It has been over a month since the National Flood Insurance Program issued a policy due to the government shutdown, placing many homeowners in need of flood coverage in limbo. The 30-day grace period for renewing NFIP policies has ended, leaving homeowners uninsured and preventing some homebuyers and sellers from closing deals on properties in flood zones.

Given the current situation, homeowners that need flood insurance have two options: go without or seek a policy in the private flood marketplace. The latter has several benefits compared to the NFIP, including higher building and personal property limits, more deductible options, personal property replacement cost coverage, additional living expenses, no co-insurance penalties and no waiting period.

If your customers are forgoing coverage because of of the NFIP pause, TMH₂O may be your solution. Learn more below or click here to get appointed to quote, bind and issue primary residential flood policies today.