US News: NFIP Program Runs Out of Funding

It’s a big problem for homeowners in the USA, as the NFIP kinda goes into freeze mode. Basically funding has run out. The NFIP website is still functioning but has a notice on the home page stating nothing will be updated.  Not good. The bigger problem is that homes deemed to be at risk from flooding, both coastal and inland lake areas, would be difficult to get a mortgage on without the NFIP back-up.

In the event of a flood the NFIP borrows cash from the US Treasury then pays it back, but the issue is that some $23 billion is outstanding right now. The solution would be to increase premiums as asset values rise of course, but that isn’t likely to play well with voters who want to buy – and insure – wooden houses built near scenic coast, or river views.

Here’s some comment from Hiscox;

Following the lapse of the National Flood Insurance Programme (NFIP) last night, the private flood insurance market – including the Hiscox FloodPlus product – is currently the only viable alternative for home and business owners seeking uninterrupted flood protection.

Unlike the NFIP, which is currently unable to issue or renew policies, Hiscox FloodPlus remains fully operational and offers broader coverage, higher limits, and faster digital quoting. It is distributed nationwide through a network of coverholders and retail agents, who can provide expert guidance to home and business owners on securing uninterrupted flood cover through private alternatives including FloodPlus. This means a quote can be obtained quickly via the FloodPlus digital platform, and coverage can start immediately to avoid any gaps in flood protection.

Tom King, Flood Line Underwriter at Hiscox, said: “With the National Flood Insurance Programme (NFIP) unable to issue or renew policies at present, private insurance market solutions like Hiscox FloodPlus are the only option for home and business owners who need uninterrupted flood protection. FloodPlus delivers enhanced cover, higher limits, and faster digital quotes, and most importantly ensures that home and business owners aren’t left unprotected and exposed during peak flood season.”