Flood Insurance Bill Ensures Private Coverage Counts Toward Federal History, Boosting Consumer Choice

The Flood Insurance Consumer Choice Act of 2025 is short, focused, and potentially a big deal for anyone living in a flood zone who has flirted with ditching the federal program. Specifically, Section 2 of this Act mandates a change in how the Federal Emergency Management Agency (FEMA) Administrator calculates a policyholder’s “continuous coverage” history for the National Flood Insurance Program (NFIP).

Why Your Insurance History Matters

When you buy flood insurance through the NFIP, maintaining continuous coverage is key. If you let your policy lapse, you can lose access to lower, subsidized rates or face higher premiums when you try to get coverage again. Previously, if you decided to leave the NFIP and buy a policy from a private insurance company—which many homeowners do for better rates or coverage—that time spent in the private market might not have counted if you later needed or wanted to switch back to the NFIP. This created a real disincentive for shopping around, effectively locking people into the federal program if they wanted to protect their continuous coverage status.

Closing the NFIP Loophole

This bill closes that loophole. Under the new rule, if you secured private flood insurance to meet the mandatory coverage requirements (as outlined in the Flood Disaster Protection Act of 1973), FEMA must now treat that period of private coverage exactly the same as if you had an NFIP policy. This means the time you spent covered by a private insurer now counts toward your continuous coverage history under Section 1307(g)(1) of the National Flood Insurance Act of 1968.

Real-World Flexibility for Homeowners

Think of it this way: Before, switching to a private insurer was a risk. If the private market policy became too expensive, or if you sold your home to someone who preferred the NFIP, you might have effectively been penalized for the gap in your NFIP history. Now, if you are a homeowner who switched to a private policy three years ago because it offered better terms, and now you want to return to the NFIP, those three years of private coverage are officially recognized and credited. This removes a major barrier to entry for the private flood insurance market and gives consumers real flexibility. It ensures that homeowners who shop for the best deal aren't inadvertently setting themselves up for higher rates or coverage difficulties down the line. It’s a straightforward administrative fix that puts the consumer back in the driver’s seat.