National Flood Insurance Program Now $22.5 Billion In Debt; Current Authorization Ended 9/30/2025

Even though a major hurricane has yet to make landfall this season, 2025 has been a year of devastating floods. Thousands of flash floods across the country this summer sent torrents of water into people’s homes, swept away cars, knocked down trees, and ripped bridges away. Floods over the July 4 weekend in Central Texas killed at least 135 people and caused upward of $22 billion in damages, according to one estimate.

Though lost lives can never be recovered, the US has long had a program designed to help surviving homeowners financially devastated by floods. But at a moment when so many are trying to return home and the costs of flood recovery are rising, the National Flood Insurance Program is sinking deeper into the red. Earlier this year, the program borrowed $2 billion from the US Treasury to help cover claims from major storms in 2024 like Hurricane Helene and Hurricane Milton. Even though the program previously had $16 billion in debt forgiven in 2017 — the year Hurricanes Harvey, Maria, and Irma struck — NFIP’s total debt is now more than $22.5 billion, and is likely to rise further as claims from floods this year complete processing. And an overwhelmed flood insurance system could be devastating for the homeowners who depend on it — whether they want to or not.

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The current national flood insurance system was founded in 1968. Today, the federal program has 4.7 million policyholders and provides $1.3 trillion in flood coverage. Unlike other perils such as fire and earthquakes, there are few private companies willing to insure properties against floods. For the vast majority of homeowners, NFIP is the only game in town, or the only plan within their budget. The program is funded through short-term authorizations from Congress. The program is currently authorized until September 30, 2025.

The challenge for the NFIP is that it’s boxed in by mandates set by Congress that make it almost impossible for it to balance its books. NFIP must make flood insurance available to homeowners in areas that face flood risks, and it has to keep rates affordable, even as risks increase. “The tension between widespread access and being fiscally sound has been there since the beginning,” Kousky said. The federal program can’t simply jack up its prices or cut off its riskiest customers the way private companies do. It’s a crude, blunt tool for mitigating an expansive, evolving, and complicated problem.

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https://www.vox.com/climate/462061/flood-insurance-nfip-hurricane-fema-helene-climate