New Bill Seeks to Align Private Flood Insurance with NFIP Coverage Rules

U.S. Representatives Kathy Castor and Maria Salazar have reintroduced the Continuous Coverage for Flood Insurance Act, which aims to enhance access to private flood insurance while preserving National Flood Insurance Program (NFIP) pricing advantages. The legislation would require FEMA to count compliant private flood insurance policies as meeting NFIP's continuous coverage criteria, allowing policyholders to switch between private and federal flood insurance without losing favorable grandfathered rates. This initiative responds to shifts in Florida’s property insurance market, where private insurers are reclaiming risk from the state-backed Citizens Property Insurance Corporation amid regulatory changes and litigation. Citizens’ policy counts have declined by about one-third year over year with a concurrent reduction in reinsurance premiums. The bill seeks to expand consumer choice, enable price competition, and prevent premium shocks for homeowners by aligning NFIP continuous coverage rules with private flooding policy eligibility. Additionally, it aims to mitigate federal fiscal exposure by increasing private sector involvement in the flood insurance market, building on previous reforms such as the Biggert-Waters Act of 2012 and subsequent FEMA regulations. The proposal also addresses ongoing coverage gaps, noting national flood insurance participation remains low despite a significant portion of homeowners expressing flood insurance awareness. Recognizing private flood insurance under NFIP continuous coverage could reduce financial barriers and support affordability without altering mandatory NFIP purchase requirements.