Why Purchasing Life Insurance Early Matters
At 11:59 p.m. on September 30th, the National Flood Insurance Program (NFIP) authorization expired. Congress did not pass a reauthorization or a Continuing Resolution to keep the FEMA flood program in place. This lapse has created a temporary shutdown, which directly impacts homeowners, real estate closings, and insurance agents across the country, including here in Texas.
When the NFIP is inactive, there are different restrictions on how policies are processed and managed. New applications, renewals, endorsements, and cancellations often go into a pending status until the program is reauthorized. For many families and businesses, this can create a gap in coverage and a concern about whether their property is protected against flood damage.
With weather patterns becoming more unpredictable, preparing ahead is critical. Whether Congress reauthorizes the NFIP quickly or not, alternative private flood insurance providers ensure families and businesses can still protect their financial future against one of the most devastating natural disasters.
How Does the NFIP Lapse Affect Texas Homeowners?
Texas residents are no strangers to flooding. From the Hill Country to Austin to the Gulf Coast, flash flooding and river flooding remain among the most frequent and costly natural disasters.
- New NFIP flood policies cannot be issued until reauthorization.
- Renewals are delayed, leaving some homeowners at risk.
- Real estate closings that require flood coverage may face complications if they do not accept a Private Flood Insurance Provider (PFIP).
Private Flood Insurance Options
While the NFIP is paused, private flood insurance carriers remain available. Some carriers, allow homeowners to obtain new coverage or maintain protection even during a federal shutdown. Private flood markets can offer more flexible coverage limits, additional living expense options, and in many cases competitive pricing compared to NFIP policies. These policies remain available during the NFIP hiatus and can be an important safeguard for residential and commercial properties:
- Higher Coverage Limits: Private flood carriers can provide dwelling coverage that exceeds the NFIP maximum of $250,000 and contents coverage beyond $100,000.
- Replacement Cost Coverage: Some private carriers offer replacement cost coverage for both the structure and personal property
- Loss of Use or Additional Living Expenses: Private flood insurance may cover temporary housing costs if a flood makes your home uninhabitable.
- Optional Excess Flood Coverage: For high-value homes in flood-prone areas, private carriers can layer excess coverage on top of NFIP or primary private policies.
- Simplified Underwriting: Many private carriers rely on advanced flood mapping technology, which can make underwriting more flexible for properties that fall outside high-risk FEMA zones.
Private carriers currently available in Texas include well-known specialty insurers and global reinsurance-backed programs. These markets give homeowners and business owners the ability to protect property without congressional interruption.
Now is the time to work with Britton and Britton Insurance on all of your flood needs, Commercial and Personal. Our Private Flood Insurance Programs (PFIP) are delivered through AM Best “A” rated insurers. We can offer Primary Flood Limits up to five million. The policy wording meets lender compliance and often we can provide more options than the NFIP. Note: the PFIP is most competitive in tougher flood-prone, higher-risk areas.
Why Flood Insurance Matters More Than Ever
It is important to remember that standard homeowners insurance policies in Texas do not cover flood damage. Flood coverage must be purchased separately, either through the NFIP or a private market provider. Even if your home is not located in a high-risk flood zone, nearly 40 percent of all flood claims come from properties outside designated flood hazard areas (FEMA, 2024). According to FEMA, just one inch of floodwater in a home can cause more than $25,000 in damage. Without active flood insurance, that risk falls directly on the homeowner.
Key Takeaways During the NFIP Lapse
What You Need to Know Right Now:
- New NFIP flood policies cannot be issued until reauthorization – Renewals may be delayed or placed in pending status
- Real estate closings that require flood coverage may be impacted
- Private flood insurance remains available, including residential and commercial coverage
- Standard homeowners insurance does not cover flood damage
Final Thoughts
Floods do not follow maps and they do not wait on Congress. Protecting your home or business requires action, even during a program lapse. If you need to review your current flood policy, explore private options, or secure coverage for an upcoming real estate closing, our team is here to help.
Contact the Britton and Britton insurance agency today to discuss flood insurance solutions tailored for South, Central Texas, Austin, and the Hill Country.
Sources:
FEMA. Flood Insurance Basics. https://www.fema.gov/flood-insurance
National Flood Insurance Program (NFIP). https://www.fema.gov/flood-insurance/rules-legislation
Related posts
