Pallone Files Bill to Fix Flood Insurance, Says Republican Shutdown Shows Why Congress Must Make Program Permanent

WASHINGTON, D.C. – Congressman Frank Pallone, Jr. (NJ-06), Ranking Member of the House Energy and Commerce Committee, said the Republican government shutdown underscores the urgent need for his new National Flood Insurance Program Reauthorization and Reform Act of 2025 (H.R. 5484), a long-term, bipartisan plan to make flood coverage affordable, reliable, and immune from future political chaos.

“Because of the Republican shutdown, Americans who need flood insurance to protect their homes can’t purchase new policies or renew existing ones through FEMA’s National Flood Insurance Program,” Pallone said. “The funding lapse proves what I’ve been saying for years: the NFIP can’t keep teetering from one deadline to the next. My bill restores long-term stability so homeowners are protected no matter who’s in power in Washington.”

The NFIP provides $1.3 trillion in coverage to 4.7 million policyholders, including thousands in New Jersey. When the Republican shutdown began on October 1, FEMA lost the authority to issue or renew coverage, freezing the federal safety net for homeowners and small businesses nationwide. The funding lapse denies approximately 1,400 homeowners per day the flood insurance they need. 

Flooding remains the nation’s most costly natural disaster, causing between $180 billion and $500 billion in damage each year, according to the Joint Economic Committee. Nearly 40% of federal flood claims come from outside high-risk zones, showing that inland and coastal families alike depend on the program’s stability.

Pallone’s bipartisan bill would reauthorize the NFIP through 2030 and enact major reforms to protect policyholders and taxpayers by:

• Capping annual premium hikes at 9 percent under FEMA’s Risk Rating 2.0.
• Creating income-based vouchers to keep coverage affordable.
• Expanding investments in flood mapping and mitigation to reduce losses.
• Strengthening contractor oversight and establishing an independent appeals office to ensure fairness.

“The National Weather Service has issued more than 3,000 flash flood warnings this year,” Pallone added.  “We can’t keep gambling with the program families rely on to rebuild after disaster. This shutdown just makes clear what’s at stake.”

The NFIP Re Act of 2025 is endorsed by the National Association of Counties, National League of Cities, U.S. Conference of Mayors, New Jersey Organizing Project, American Policyholders Association, and Coalition for Sustainable Flood Insurance. 

"Reforming the National Flood Insurance Program will ensure that future disaster survivors do not have to go through the struggles I faced after Hurricane Ida.,” said Eric Vaughn, Manville NJ Resident, Hurricane Ida Survivor and New Jersey Organizing Project member. “Weathering a storm is hard enough, but the obstacles we faced trying to recover through FEMA took a toll on my family. Too many Ida survivors are still waiting on assistance, and we know that future storms are coming. Elected officials need to stop fighting. We are in the middle of hurricane season and people are in danger of losing everything because coverage cannot be attained. Myself and my colleagues at New Jersey Organizing Project are grateful to Congressman Pallone for reintroducing this bill that will give survivors the stability they deserve." 

“The American Policyholder Association has endorsed the NFIP Re Act of 2025. After dozens of temporary re-authorizations, the National Flood Insurance Program is long overdue for a comprehensive reform effort. The NFIP Re Act is the only proposed  legislation that has been crafted based on input from stakeholders such as policyholders and impacted communities. The APA firmly encourages Congress to pass this bill, which will transform the NFIP into a more effective tool to help American families recover from the impacts of devastating flood damage.” – Douglas Quinn, Executive Director of the American Policyholders Association 

“The bipartisan National Flood Insurance Program Reauthorization Act would provide much-needed, long-term certainty and key reforms that would benefit counties and our residents,” said National Association of Counties Executive Director Matthew Chase. “Reauthorizing the program for five years would ensure continuous operation and greater stability for policyholders. Additionally, we appreciate the caps placed on annual premium increases, affordability provisions for low- and middle-income policyholders and increased investments in flood mitigation. The bill would also increase transparency on FEMA’s new risk rating system, known as Risk Rating 2.0, and freeze interest payments on the NFIP debt, helping to make the program solvent. Counties thank Representatives Pallone and Higgins for their leadership and look forward to working with our bipartisan congressional partners to secure passage of this legislation.”

Peter Waggonner, Senior Policy Advisor for the Coalition for Sustainable Flood Insurance, said, "Our coalition's various stakeholders, from insurance agents to real estate agents and homebuilders to policyholders, understand the value of the NFIP and are united around its long-term reauthorization. Flood risk - having become reality in 99% of counties in the past 20 years - is greatly underappreciated, and this lapse aggravates risk exposure. Thankfully, the NFIP Re Act proposes to modernize the program, while respecting Congress's original intention for NFIP to offer insurance at 'reasonable rates' and 'encourage preventive and protective measures,' thereby reducing flood risk itself."

 Watch Pallone’s full press conference here.