Currently, policies of insurance for flood, even if purchased through your insurance agent or normal insurance company, are Federal Flood Insurance Policies issued through the National Flood Insurance Program, if your community is participating in the NFIP. Because the program is federally subsidized, homeowners on floodplains are able to purchase the polices at rates much lower than the underlying risk. As such, the NFIP is approximately $25 billion in debt.

Following what has been a catastrophic hurricane season so far—with still approximately 2 months to go—the Trump Administration revealed a proposal for the future of the NFIP program. As reported Wednesday, October 4, 2017 in Bloomberg,1 President Trump has proposed ending federal flood insurance for new homes in areas most at risk of flooding. This is expected to curtail new construction in parts of Florida, Louisiana, and all along the Eastern Seaboard where hurricanes and flooding are prominent.

Mick Mulvaney, the Director of the White House Office of Management and Budget, sent a letter to Congress proposing that homes built in flood plains after 2020 be prevented from purchasing NFIP policies, and instead homeowners could seek private coverage. The proposal would continue the insurance for existing homes within the 100-year flood plain, but discontinue for new homes in those zones. The plan would also give FEMA the authority to cut-off coverage for properties that flood repeatedly.

A similar proposal was considered earlier this year by Congress. Lawmakers face a deadline of December 8, 2017, to reauthorize the program.
1 Christopher Flavelle, Trump wants to curtail flood insurance in flood-prone areas, Bloomberg, Oct. 5, 2017.

  • llewellynh

    This makes it very hard on people who went through Sandy because the rules just don’t stop changing. Many of us would not have rebuilt and come back if we had known this was going to happen.

    • Jennifer Van Voorhis

      My reading of the amendment is that it only applies to new construction, and “older” homes are grandfathered in (except possibly for those that have continual flooding, so if you had flood during Irene, Nemo, Sandy, etc. you might be responsible for purchasing a policy independent of the NFIP), but if, like a lot of homes, Sandy was the first flood event, you should still qualify for the NFIP policy. It will be interesting to see what Congress does following this year’s hurricane season.

  • shirley heflin

    Dear Ms. Van Voorhis:

    Frankly, I believe it should be “buyer beware” if someone buys in a known flood area and – if they choose to do so w/such knowledge – private carriers should be responsible for their flood loss. This would mean, of course, they would have to buy private insurance if they want to live in a beachfront condo., riverside home, etc. The risk is obvious and why should the federal government be forever in debt for people that knowingly choose to reside in areas where the stakes are raised for catastrophe?

    Finally, I also believe that private insurance companies are more beneficial because they are generally subject to “insured friendly” laws, are regulated by Insurance Commissioners, must adhere to claims procedures, etc.

    Tampa, FL