National Flood Insurance Program Reauthorization and Reform Act of 2025

This provision reauthorizes the National Flood Insurance Program's financing and program expiration until September 30, 2030. Crucially, it also allows the NFIP to continue operations and make payments from the National Flood Insurance Fund during periods of a lapse in appropriations, preventing program shutdowns during government funding impasses.

This section limits annual increases in flood insurance premiums, surcharges, and fees to no more than 9% for a 5-year period. This cap applies even if properties are re-rated under the Risk Rating 2.0 methodology and extends to new policyholders for properties previously covered by the cap.

This section authorizes FEMA to establish a means-tested program providing graduated discounts on flood insurance costs for eligible policyholders. Eligibility is for primary residential dwellings where household income is not more than 140% of the area median income. The bill authorizes significant appropriations for this program from FY2024 to FY2028, starting at $250 million and rising to $600 million.

This provision amends the NFIP to tie property and contents coverage limits to a 'baseline amount' derived from the maximum original principal obligation of a conventional mortgage purchasable by the Federal National Mortgage Association (Fannie Mae). This allows for higher coverage limits than the current fixed dollar amounts, with residential property coverage up to 200% of the baseline amount and contents coverage up to 50% of the baseline amount.

This section mandates that 10% of the average amount appropriated to the Disaster Relief Fund over the preceding 10 fiscal years be set aside for flood mitigation activities. This funding is specifically targeted at severe repetitive loss structures and properties that have seen the largest increase in actuarial risk under Risk Rating 2.0.

This section increases the maximum Increased Cost of Compliance (ICC) coverage to $120,000 per property. It also expands the types of eligible mitigation activities to include pre-disaster mitigation projects, alternative mitigation methods, and costs associated with the purchase, clearing, and stabilization of property for acquisition or relocation projects, with specific requirements for maintaining open space.

This section authorizes FEMA to provide capitalization grants to State or Tribal governments to establish revolving loan funds for flood mitigation. These funds will offer financial assistance to homeowners, businesses, nonprofits, and local governments for projects that reduce flood risk, with a strong emphasis on assisting low-income homeowners and areas. The section details allocation formulas, matching fund requirements, and eligible uses for the funds.

This section mandates significant updates to flood mapping. It expands the Technical Mapping Advisory Council to include a catastrophic risk modeling expert and requires the Council to develop standards for State and local governments to create their own flood risk maps, which FEMA must certify for use under the NFIP. It also requires FEMA to establish a dynamic, database-derived digital display environment for flood hazard risk, including structure-specific information and claims history, by 2030.

This provision establishes a formal right for State or local governments, or property owners/lessees, to appeal FEMA's denial of a request to update a flood insurance rate map. Appeals can be based on scientific inaccuracy or mitigating factors. Successful appeals can lead to policy cancellation with refunds for up to 3 years of premiums or reduced coverage with corresponding refunds, and reimbursement of appeal expenses for errors made by FEMA.

This section requires FEMA to establish rules for assessing the level of protection provided by non-accredited levee systems and setting flood insurance rates for areas behind them. It prohibits FEMA from designating areas protected by accredited levee systems as special flood hazard areas or imposing mandatory flood insurance purchase requirements in such areas. It also establishes an appeals process for communities disputing FEMA's assessment of levee protection or residual risk.

This section prohibits the Secretary of the Treasury from charging FEMA interest on amounts borrowed by the NFIP that were outstanding as of the date of enactment, for a 5-year period. The amounts that would have accrued as interest during this period are instead to be deposited into the National Flood Mitigation Fund to support mitigation activities.

This section caps the reimbursement paid to Write Your Own (WYO) property and casualty insurance companies for selling, writing, and servicing flood insurance policies at no more than 22.46% of the aggregate premiums charged. It also mandates that WYO companies pay their agents a commission of not less than 15% of the aggregate premiums sold by the agent.

This section establishes a rebuttable presumption that physical or structural damage to a foundation was *not* caused by earth movement if flood caused direct physical change to the structure and the damage was not present before the flood. Insurers can only rebut this presumption with an engineering report meeting new FEMA standards, clearly demonstrating the damage was caused by earth movement unrelated to flood forces like hydrostatic pressure, buoyancy, hydrodynamic force, or scouring.

This section establishes an Independent Office for Policyholder Appeals within FEMA to provide a non-adversarial administrative review of denied flood insurance claims. Policyholders must exhaust this appeals process before filing a civil action. The Office must issue final decisions within 90 days of receiving all necessary information, with interest accruing on successful claims if deadlines are missed. It also reforms judicial review, clarifying that the Administrator's appeal disposition is not competent evidence of liability in court.

This section mandates that FEMA provide policyholders with true, complete, and unredacted copies of all claim file documents and technical assistance reports (e.g., engineer reports) within one week of a written or online request. It also requires WYO companies and direct servicing agents to affirmatively notify claimants of their right to obtain these documents within 30 days of a claim notice.

This section establishes a 60-day deadline for FEMA to make an initial determination and provide notification regarding approval or disapproval of a flood insurance claim after receiving a proof of loss. This period can be extended by an additional 30 days under extraordinary circumstances. If the deadline is not met, the claim amount will be increased with interest, accruing from the initial claim filing date.

Beginning September 30, 2024, new flood insurance coverage under the NFIP will not be provided for real property unless the relevant public body (state or local government) has imposed a statutory or regulatory duty on sellers or lessors (for leases over 30 days) to provide a property flood hazard disclosure. This disclosure must include actual knowledge of prior flood damage, insurance claims, repetitive loss designations, federal insurance obligations, wetland location, elevation certificates, and prior disaster assistance.