National Flood Insurance Program Has Lapsed: 500,000 Louisiana Families Now Without Coverage Options

LAFAYETTE, La. (KPEL News) — The National Flood Insurance Program has lapsed after Congress failed to reauthorize it by yesterday’s midnight deadline, cutting off coverage options for nearly half a million Louisiana families and freezing real estate transactions across the state’s flood zones.

According to FEMA, the agency no longer has authority to issue new policies or process renewals following the September 30, 2025 expiration.

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The lapse hits Louisiana harder than almost any other state. Louisiana leads the nation in repeat flood losses and has received more federal flood insurance money than any other state. Louisiana has collected over $20 billion in NFIP payouts across more than 361,000 claims since 1968—proof of the state’s constant battle with flooding from coastal erosion, hurricanes, and storms that overwhelm drainage systems.

What Louisiana Homeowners Need to Know Right Now

With NFIP lapsed, FEMA has lost authority to issue new flood insurance policies or renew expiring ones. Families trying to buy coverage or renew existing policies are now locked out until Congress reauthorizes the program.

Here’s what the lapse means for existing policies. According to the National Association of Realtors, existing NFIP policies remain in effect until they expire, and claims will still get paid as long as FEMA has money. But no renewals can be processed during the lapse. Any policies expiring now or in the coming days cannot be renewed until Congress acts.

The funding situation compounds the problem. With NFIP lapsed, FEMA’s borrowing power has dropped from $30.4 billion to just $1 billion. That means claims could take longer to pay if a major flood hits during this lapse—a real threat during Louisiana’s ongoing hurricane and storm season.

Louisiana’s Real Estate Market Now Frozen

Louisiana’s housing market is already feeling the impact. Mortgage lenders require flood insurance for properties in Special Flood Hazard Areas—places with a 1% or higher annual flood risk. Without NFIP issuing new policies, thousands of real estate closings are now on hold across Louisiana’s coastal and river parishes.

The National Association of Realtors estimates the lapse affects about 1,300 property sales nationwide each day, roughly 40,000 closings per month. For Louisiana, with nearly 500,000 active NFIP policies, the damage hits hardest in Jefferson, Orleans, Calcasieu, and other flood-prone parishes where flood insurance is required for home purchases.

Real estate associations warned the lapse would stop thousands of home sales across Louisiana. During a June 2010 lapse, over 1,400 home closings were canceled or delayed each day nationwide—more than 40,000 sales monthly. Louisiana’s housing market, already struggling with insurance problems, now faces that same uncertainty.

Congressional Efforts and Louisiana’s Advocacy

Louisiana’s congressional delegation pushed hard for NFIP reauthorization before the deadline. U.S. Senator Bill Cassidy introduced legislation to extend the program through December 31, 2026—much longer than the 33 short-term extensions Congress passed since 2017. Congress failed to act before yesterday’s deadline.

“Where does that leave the elderly folks in Calcasieu Parish?” Senator Cassidy said on the Senate floor days before the lapse. “We cannot let a congressional funding fight keep them from receiving the coverage they need.”

Cassidy also pushed for reforms to make flood insurance more affordable, fighting FEMA’s Risk Rating 2.0 system that drove up premiums for low- and middle-income homeowners. He introduced the Flood Insurance Affordability Tax Credit Act in February to give households enrolled in NFIP a 33% refundable tax credit. Those reforms remain stalled.

Louisiana Insurance Commissioner Tim Temple traveled to Washington, D.C., before the deadline to push the FEMA Review Council to extend the program. The lapse comes during peak hurricane season, when Louisiana families need flood protection most.

Understanding Louisiana’s Deeper Flood Insurance Crisis

The NFIP lapse compounds Louisiana’s existing flood insurance crisis. About 70,000 NFIP policies were dropped in Louisiana between 2022 and 2024 as costs under Risk Rating 2.0 pushed coverage out of reach. Combined with Louisiana’s homeowners insurance crisis, more people went uninsured despite real flood risks. Now those who wanted to maintain or buy coverage can’t.

Louisiana’s geography makes flooding a constant threat. The state ranks first nationally for repeat flooding among NFIP-covered properties. Just over 43,000 Louisiana properties have filed multiple flood insurance claims over the past decade. Jefferson and Orleans parishes account for about 40% of the state’s repeat loss claims.

The numbers are brutal for Louisiana families. Between rising flood insurance premiums, increasing homeowners insurance costs, and everyday expenses, people were already forced to make hard choices. Some dropped flood coverage entirely, betting they could handle losses rather than give up other necessities. Now the lapse removes the choice entirely for anyone needing new or renewed coverage.

What Happens Now for Louisiana Families

Congress still needs to reauthorize NFIP. Several bills have been introduced, including legislation by Congressman Jared Moskowitz and Louisiana representatives Troy Carter, Cleo Fields, and Julia Letlow that would extend NFIP through December 31, 2026. But the authorization will likely get wrapped into broader government funding negotiations, and there’s no timeline for when Congress might act.

The Congressional Research Service notes this is the program’s 34th authorization crisis since 2017, with four previous lapses between 2010 and 2011. Each lapse disrupted the market and created problems for thousands of homeowners and real estate transactions. Past lapses lasted days to weeks before Congress acted.

If you have an existing NFIP policy that hasn’t expired yet, it remains in effect and claims will still be paid. But if your policy is expiring now or soon, you cannot renew it until Congress reauthorizes the program. Contact your insurance agent to understand your specific situation and timeline.

If you’re trying to buy a home in a flood zone, your closing is now on hold if you need flood insurance. Mortgage lenders won’t close without required flood coverage. You’ll need to wait for congressional action or explore limited alternatives.

Private flood insurance from companies like Lloyd’s of London remains available during the lapse, though these policies are more limited and may not work in Louisiana’s highest-risk areas. Contact insurance agents who specialize in private flood coverage to explore options. Property buyers may be able to assume existing NFIP policies through an “assignment of policies” process that lets insurers substitute the buyer’s name for the seller’s without reissuing the policy.

Congress created the National Flood Insurance Program in 1968 after Hurricane Betsy devastated New Orleans. For more than 50 years, it served as a safety net for Louisiana families in flood-prone areas where private insurance is often unavailable or too expensive. The program covers 4.7 million policyholders nationwide and provides nearly $1.3 trillion in coverage against flood damage. As of today, that safety net no longer functions until Congress acts.