Trump's Trials - For private flood insurance companies, the government shutdown is good for business

Episode Date: October 16, 2025

The government-backed National Flood Insurance Program stopped writing new policies on Oct. 1 and can't resume until it's reauthorized by Congress. That may force buyers to postpone or cancel home sales, as NPR's Greg Allen reports.Support NPR and hear every episode of Trump's Terms sponsor-free with NPR+. Sign up at plus.npr.org.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

I'm Scott Detrow, and this is Trump's Terms from NPR. We're under invasion from within. If you're not going to protect your citizens, President Trump will. We all serve at the pleasure of the president. The golden age of America is upon us. We are in the golden age. Every episode, we bring you one of NPR's latest stories about the 47th president, and now he is trying to remake the federal government.

Today's story starts right after this. In the U.S. security news can feel far away from daily life. Distant wars, murky conflicts, diplomacy behind closed doors on our new show, sources and methods. NPR reporters on the ground bring you stories of real people helping you understand why distant events matter here at home. Listen to sources and methods on the NPR app or wherever you get your podcasts. I'm Steve Inskeep. People who need flood insurance for their homes are having trouble getting it now that we are 16 days into the government. shut down. The government-backed National Flood Insurance Program stopped writing new policies October 1st and cannot resume until Congress reauthorizes it. Homebuyers without that insurance may have to postpone or cancel their home purchases unless private companies step in with private flood insurance. NPR's Greg Allen reports. Florida is by far the nation's biggest

flood insurance market. Many people live in high-risk flood zones where it's required by mortgage lenders. Andy Kasten, an insurance broker in Fort Lauderdale, says the government shutdown is causing problems. Days before closing on the sale of a home this month, one of his customers discovered he would need flood insurance. Unfortunately, Kastin says, because of the shutdown, the $700 annual flood policy he expected to purchase from the government program was no longer available. We just had to write a private flood policy and it ended up conquering $1,200 and change. So because, you know, we had to wait, he had to purchase the more expensive policy. Private flood insurance has only been widely available since 2019, but now accounts for an increasing

share of the residential and commercial market. John Dixon, the CEO of Aeon Edge, a private insurance company, says for his and other companies, the government shutdown is an opportunity. We've seen an incredible increase in interest and activity. A great number of quotes coming in that we haven't before. The private flood insurance market has grown rapidly over the last several years, in part because it provides coverage higher than the $250,000 limit available through the federal program. For people with homes or businesses in high-risk flood zones, policies from the government program are typically cheaper than those from private insurers. But in areas without a high-risk, private companies often have lower rates. Trevor Burgess is the CEO of Neptune,

one of the largest private flood insurance companies. On October 1st, the day the government shut down, Neptune went public and began selling shares on the New York Stock Exchange. In an interview on CNBC, Burgess said, using artificial intelligence, his company can analyze the risk of individual properties. So your house can be specifically underwritten for its risk. So we tell the truth to consumers. If we say that it's $200 a year, it's pretty low risk. If we say it's $12,000, that's pretty high risk. And if we say no, you should move. The government-backed flood program, by contrast, rarely declines to offer coverage, although policies sometimes are very expensive. With the government shutdown, Neptune released a study that

proposes moving more customers from the government program to private insurance. It would make the National Flood Insurance Program, the insurer of last resort, providing coverage only to customers who can't buy a policy on the private market. Amy Bach, with the Consumer Group United Policyholders, says private companies play a valuable role in the market, but she worries about how accountable they will be to consumers, especially after a major disaster. As an example, she points to Superstorm Sandy. Months after the storm in 2012, complaints from policyholders and pressure from elected officials force the National Flood Insurance Program to reopen many claims. And that's what you get, you know, with a government-backed program. You get accountability.

And you don't always get that in the private sector. After Florida, Louisiana is the state with the most homes and businesses receiving coverage from the federal flood program. Louisiana's insurance commissioner, Tim Temple, says it provides reasonably priced policies for people who work in fishing, oil and gas, and other coastal industries. It's imperative that we have a functioning and affordable national flood insurance program. And I don't think private industry can come in and be the answer to all of those folks. Temple says the national flood insurance program needs to be not just reauthorized, but overhauled, so that over the long term, it keeps flood insurance affordable. Greg Allen, NPR News, Miami. Before we wrap up a reminder, you can find more coverage

of the Trump administration on the NPR Politics Podcast, where you can hear NPR's political reporters break down the day's biggest political news with new episodes every weekday afternoon. And thanks, as always, to our NPR Plus supporters who hear every episode of the show without sponsor messages. You can learn more at plus.npr.org. I'm Scott Detrow. Thanks for listening to Trump's terms from NPR.