BY FIRM PRESIDENT MEL MONTAGNE
Switching from private flood insurance back to the National Flood Insurance Program (NFIP) can trigger several rate-related issues. The biggest one is how FEMA treats “continuous coverage.”
Key Rate Issues When Going Private → NFIP
- Continuous Coverage Rule: NFIP requires continuous coverage (no lapses) to keep lower/subsidized rates, pre-FIRM (flood insurance rate map) discounts, or grandfathered rates (locking in an older, lower-risk flood zone or Base Flood Elevation). Time covered by a private flood policy generally does NOT count as continuous coverage for NFIP purposes. When you switch back, FEMA often treats it like a new policy or a lapse — so you may lose grandfathering and pay full current Risk Rating 2.0 rates (which reflect your property’s actual risk).
- Potential Premium Increase: You could face a significant jump if your property was previously on a subsidized or grandfathered NFIP rate. Under Risk Rating 2.0 (current system), new policies get priced based on individual property risk (elevation, distance to water, use of the structure and construction type). No automatic “old rate” carryover from private coverage.
- 30-Day Waiting Period: New NFIP policies (including switch backs) have a standard 30-day waiting period before coverage starts — unless it’s tied to a loan closing or other exceptions. Plan carefully to avoid a gap.
- No Automatic Refunds or Credits: Unlike switching NFIP-to-private (where you can often get a pro-rated NFIP refund), there’s no special credit when returning.
Other Factors That Affect Your New NFIP Rate
- Current flood maps and your property’s specifics (age, elevation, construction)
- Any prior claims history
- Community Rating System (CRS) discounts (if your area qualifies)
- Whether you had any pre-FIRM or grandfathered status before going private
As of 2026 Legislation has been proposed in Congress to let private flood time count toward NFIP continuous coverage (to make switching easier), but it has not passed yet. So the penalty still applies in most cases.
Recommendations
- Get quotes first — Ask an independent flood agent for both NFIP and private options before switching back. Provide your address and elevation certificate if you have one.
- Check with your lender — They must accept the new NFIP policy.
- Avoid gaps — Time the switch so coverage overlaps if possible (especially in hurricane/flood season).
- Consider a hybrid — Some people keep a base NFIP policy + private excess coverage for higher limits.
Bottom line: Switching private → NFIP is doable but can raise your premium if you lose discounted status. It’s often safer to stay with NFIP if you value stability and grandfathering, or use private only if you don’t plan to return.
Deeper Dive into Private Flood Insurance
Following the most recent lapse in the NFIP due to the temporary government shutdown, Senator Elizabeth Warren (D-MA) sent a letter to Trevor Burgess, CEO of Neptune Flood, a private flood insurance carrier that claims to offer affordable private flood insurance with higher limits than NFIP.
Sen. Warren asserted in her letter that Neptune “took this lapse as an opportunity to promote its policies and asserted that private companies should eventually displace NFIP in the flood insurance market.”
She went on to question Burgess about Neptune’s business model and the potential to harm consumers who leave the NFIP to switch to a private insurer.
You can read Sen. Warren’s letter below.