NFIP Code Blue

A Code Blue is a high-priority hospital alert signifying a patient is experiencing a life-threatening medical emergency, usually cardiac or respiratory arrest, requiring immediate resuscitation. Unfortunately, the National Flood Insurance Program (NFIP) is currently experiencing its own Code Blue.  

The NFIP provides coverage to 4.7 million policyholders across 23,000 communities nationwide. In addition to insurance, the NFIP oversees floodplain management, flood hazard mapping, and flood mitigation to meet its statutory obligations. A small but dedicated federal staff carries out these functions by relying heavily on contracts, cooperative grants, arrangements, and other formal agreements with private insurers, state/local governments, and vendors. Ironically, this approach to administering the NFIP aligns with the Trump Administration’s priorities for state and local governments to play a more significant role in resilience and preparedness and for greater private sector involvement.

However, this public-private operating model is both a strength and a vulnerability. While it limits the federal staffing footprint, the NFIP cannot meet its statutory obligations without the ability to update, renew, and enforce these critical agreements. Disruptions can quickly impair core program functions, and statutory authorization alone is not sufficient to ensure operational continuity. And while the program is now authorized until September 30, 2026, operationally, the NFIP is far from healthy.

We began to see the warning signs last summer and fall. Even though Congress obligated funding, we did not see FY2025 Notice of Funding Opportunities (NOFOs) for three key programs:

• Cooperating Technical Partners (CTP) – a cooperative agreement through which states and regional entities lead flood mapping and remapping efforts
• Flood Mitigation Assistance (FMA) – a grant program to mitigate at-risk flood-prone structures that have flood insurance
• Community Assistance Program (CAP) – a cooperative agreement through which states help FEMA manage NFIP floodplain management requirements for 23,000 communities  

Although a CAP NOFO eventually came out in August, none emerged for the CTP or FMA programs.  And while CAP awards were largely made by the end of the last fiscal year, states report they have not yet been reimbursed for work done in the first quarter of the fiscal year (Oct-Dec 2025).

Another troubling situation involves the RiskMAP regional task orders. From what I understand, the contracts were ready to go — sitting on the DHS Secretary’s desk — and simply left unsigned as the new federal fiscal year began last October 1. These contracts support much of the nation’s flood mapping. And keep in mind, this is for work that Congress has already appropriated money!

In addition, last fall the Project Management Contract for the RiskMAP program was not renewed. This meant, among other things, that Regional Office support was reduced to manage the project’s scope, budget, and timelines. The Community Engagement and Risk Communication (CERC) contract for RiskMAP was allowed to expire as well, shifting a lot of scope back to FEMA, even as the agency lost staff.  The NFIP Stakeholder Training Development and Delivery Contract, which was the primary contract used to train insurance agents on the NFIP, was also allowed to lapse.

Unfortunately, this pattern of negligent behavior has continued through the winter. As of last week, FEMA cancelled the contract to administer the NFIP Community Rating System (CRS). As a result, program operations— including annual recertifications, cycle verification visits, re-evaluations to increase rank, and entry into the program — are all on hold until FEMA staff assume those duties (which doesn’t seem likely), a new contract is issued, or statute is changed. This contractor had administered and implemented the CRS program on behalf of FEMA since the program’s inception in 1990. Currently over 1,500 communities nationwide participate in the CRS, covering 4.7 million NFIP policyholders — about 76% of the entire policyholder base. The core consequence of the funding reductions is straightforward: American families will pay more for flood insurance.

So, what will happen this spring? At the end of March, the Production and Technical Services (PTS) Standard Operations Contract will expire. This important contract covers things like RiskMAP portfolio management, including quality assurance, as well as levee support, due process support, building sciences, levee safety operations, dam safety, and national mitigation planning support. As it stands, although the existing contract has a 12-month scope, it was only funded for 10 months despite Congress fully funding the flood mapping program!

We also understand that an expiring Customer and Data Services (CDS) contract, which supports the National Flood Hazard Layer and the flood mapping library, was extended on a limited-service basis for 90 days. Meanwhile, the contracts for Letter of Map Change (MT-1 and MT-2) are set to expire in April. And we still have zero visibility on whether FY2025 funding that Congress appropriated will be made available for flood mapping through the CTP program or for flood mitigation through the FMA program. 

There are other contracts on the insurance side of the program that I have less visibility into but will expire this spring and summer if they are not extended.

Here is the bottom line. Due to negligence, incompetence, or both at the highest levels of the agency (whether it was FEMA leadership or DHS leadership — this is squarely a leadership issue), the NFIP is in critical condition. Despite it being authorized by Congress until September 30, 2026, the program is not getting the operational attention and support it needs.  

The NFIP’s delivery model depends on a small number of FEMA staff overseeing a program largely executed through grants, agreements, and contracts. When contracting breaks down — and staffing is insufficient to coordinate, process, and execute the contracts — the system begins to fail. These problems are further exacerbated when FEMA has essentially been under a gag order preventing most communication between them and their local, state, tribal, territorial, and nonprofit partners.

I, for one, am not sad to see what I believe was incompetent leadership depart DHS.  I can only hope that Senator Mullin, who is the President’s nominee to be the Secretary of DHS, will not only be a better leader but will care enough about the families and businesses of this country to ensure that FEMA — and the NFIP — recover and return to a stable condition.

Your partner in loss reduction,

Editor’s note: Updated March 17, 2026 to provide additional context to the CRS contract issue.