FEMA Tries to Keep Flood Insurance Program Alive During Shutdown

The Federal Emergency Management Agency is exploring how to continue issuing new flood insurance policies after earlier saying that it would halt the practice during the partial government shutdown, leading to a backlash from lawmakers and realtors.

The agency is working with companies that sell policies under the National Flood Insurance Program to “determine what options exist to enable the NFIP to allow the sale and renewal of flood insurance policies,” the agency said in a statement posted to its website late Thursday.

“Recognizing that many Americans rely on the NFIP to protect their homes and businesses from damage caused by flooding, FEMA is currently reviewing all legal authorities with the Administration that would allow the NFIP to continue operations without interruption, so as to hopefully minimize impacts to policyholders and insurance industry partners during this funding lapse,” FEMA said in the statement.

FEMA had earlier advised insurance companies that offer federal flood insurance policies to suspend sales and renewals under the program. Sale and renewal fees paid to those companies may be prohibited during a lapse in appropriations for the program, it said.

The earlier advisory prompted an outcry from lawmakers who last week passed an extension of the flood insurance program through the end of May.

Critics also warned that making new policies unavailable risked damaging the housing market. The National Association of Realtors estimated that as many as 40,000 home closings could be disrupted for each month new flood insurance policies can’t be issued.