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.