Quick Answer
The National Flood Insurance Program (NFIP) is authorized through December 11, 2026. If Congress does not extend it, the NFIP cannot issue new or renewal policies until it is reauthorized. Existing policies stay in force, claims are paid while FEMA has funds, and private flood insurance is unaffected. Buyers and sellers with winter closings near rivers should line up coverage now.
Federal flood insurance has a deadline again: December 11.
In early September, Congress passed a short-term spending bill that keeps federal programs, including the National Flood Insurance Program, running through December 11, according to the National Association of Home Builders. After that date, unless Congress acts again, the NFIP cannot write a single new policy.
This is a familiar cliff. The Congressional Research Service counts 36 short-term extensions of the program since the end of fiscal year 2017, per Insurance Journal. The program carries about 4.5 million policies and roughly $1.3 trillion in coverage. During the 43-day government shutdown in the fall of 2025, the program lapsed, and no new federal flood policies were sold or renewed.
Why New England should care
Our towns grew up on rivers. In Central Vermont, Montpelier, Barre and Waterbury sit along the Winooski and its branches, and the floods of July 2023 and July 2024 showed every Vermonter what moving water does to a basement and a balance sheet.
Two facts from Vermont's Department of Financial Regulation frame the stakes. First, a standard homeowners policy does not cover flood. Second, a home in a FEMA special flood hazard area has a 1% chance of flooding in any year, which adds up to about 26% over a 30-year mortgage. Depending on the area, 20% to 60% of flood damage happens outside those mapped zones.
What a lapse actually does
The National Association of Realtors spells out the mechanics. During a lapse, the NFIP cannot issue new or renewal policies. Existing policies stay in force until they expire, plus a 30-day grace period. Claims are paid as long as FEMA has funds. Private flood insurance is not affected. Most federal lending regulators suspend the flood insurance requirement during a lapse, which leaves each lender to decide whether it will close a loan in a flood zone. Some will wait.
There is one useful exception. An insurer can transfer a seller's existing NFIP policy to the buyer at closing, so no new policy is needed.
What to do before December 11
If you are buying a home in or near a flood zone and expect to close in December or January, get flood quotes this week, both NFIP and private. Ask the seller whether their NFIP policy can be transferred to you. Ask your lender, in writing, what it will do if the program lapses before your closing.
If you are selling, find your NFIP declarations page now. A transferable policy can keep your buyer's loan on schedule when a new policy cannot be written. That makes it an asset. Put it in the listing file.
If you already carry NFIP coverage and your renewal date falls in December or January, call your insurance agent now and ask how to renew before December 11.
If you live outside a mapped zone, you are not off the hook. Up to 60% of flood damage, depending on the area, happens where no lender ever required a policy.
Congress has extended this program every time so far. The risk is not that flood insurance disappears. The risk is a closing that stalls for days or weeks over a policy no one can issue. Preparation costs a phone call. A stalled closing can cost a rate lock.
Buying this winter? Read the NELR Vermont home buying guide, and call me at 802-233-4107 before you write an offer on any home near a river.
Frequently Asked Questions
When does the National Flood Insurance Program expire?
The NFIP is currently authorized through December 11, 2026, under a short-term spending bill Congress passed in early September. Congress must act again to keep it running past that date.
Can I still close on a home in a flood zone if the NFIP lapses?
Possibly. During a lapse the NFIP cannot issue new policies, but an insurer can transfer the seller's existing NFIP policy to the buyer, and private flood insurance is unaffected. Most federal regulators suspend the purchase requirement, so each lender decides whether to close. Ask your lender before you commit to a date.
Does homeowners insurance cover flood damage in Vermont?
No. Vermont's Department of Financial Regulation states that standard homeowners policies exclude flood. Flood coverage requires a separate NFIP or private flood policy.
What happens to my existing flood policy if the NFIP lapses?
It stays in force until its expiration date, plus a 30-day grace period, and claims are paid as long as FEMA has funds. Renewals cannot be issued during a lapse, so owners with December or January renewal dates should talk to their agent now.
Sources
- NAHB, Sept 4, 2026: stopgap bill extends federal programs and the NFIP through Dec. 11
- Insurance Journal, Oct 7, 2026: 36 short-term extensions since FY2017 (CRS), about 4.5 million policies and $1.3 trillion in coverage, no policies sold or renewed during the 43-day 2025 shutdown lapse
- NAR FAQ: what happens during an NFIP lapse (no new or renewal policies, existing policies plus 30-day grace, claims paid while funds last, policy transfer at closing, lenders decide, private flood unaffected)
- Vermont Department of Financial Regulation, Homeowners and Flood Insurance Overview (April 2026): flood excluded from homeowners policies, 1% a year / about 26% over 30 years in an SFHA, 20% to 60% of damage outside SFHAs
- Vermont DFR, flood insurance help page
Tony Walton, Principal Broker, New England Landmark Realty, Waterbury Center, Vermont. 802-233-4107.
:format(webp):quality(80)/u.realgeeks.media/rgtemplate/Market-Report-2.png)