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The bill preserves NFIP continuous-coverage benefits for owners using private flood insurance and encourages private-market use, but it risks shifting fiscal exposure to taxpayers, may leave some homeowners with weaker protection, and could create administrative disputes over policy qualification.
Homeowners and property owners with qualifying private flood insurance retain NFIP continuous-coverage benefits (avoiding higher NFIP rates, surcharges, or penalties if they return to the NFIP), which also incentivizes private-market uptake.
Recognizing qualifying private policies as meeting mandatory-purchase requirements prevents forced-purchase penalties and lender complications tied to perceived gaps in NFIP coverage.
Taxpayers and the federal budget could face higher costs if the policy shifts risk away from the NFIP or reduces NFIP premium revenue, concentrating uncompensated risk in the program.
Homeowners could retain continuous-coverage status under private policies that provide weaker or less comprehensive coverage than NFIP policies, leaving them exposed to gaps in protection after a loss.
Determining whether specific private policies satisfy mandatory-purchase standards may create administrative burdens and disputes for FEMA, lenders, and local governments, complicating implementation.
Based on analysis of 2 sections of legislative text.
Requires FEMA to count private flood insurance used to meet the mandatory-purchase rule as continuous coverage for federal continuous-coverage requirements.
Introduced June 12, 2025 by Richard Lynn Scott · Last progress June 12, 2025
Requires FEMA to count any time a property was continuously covered by a private-market flood insurance policy used to meet the federal mandatory-purchase rule as continuous coverage for all federal continuous-coverage requirements. This means private flood insurance that satisfied the compulsory purchase requirement will be treated the same as National Flood Insurance Program (NFIP) coverage when determining continuous-coverage status. The change reduces the risk that property owners or lenders face penalties or higher surcharges because coverage was provided by a private insurer rather than the NFIP, and it clarifies how continuous coverage is measured for insurance and administrative purposes.