Government Shutdown 2025: What It Means for Flood Insurance — and Homebuyers in New Jersey
- Adam Overmyer
- Oct 5
- 4 min read
When most people hear “government shutdown,” they think about national parks closing or political gridlock in Washington.But for New Jersey homebuyers getting ready to close on a new house — especially in coastal or flood-prone areas — this shutdown could hit much closer to home.
That’s because as of September 30, 2025, the National Flood Insurance Program (NFIP) has officially lapsed. And when NFIP funding stops, no new or renewed FEMA flood insurance policies can be issued.
For homebuyers, that means you could be ready to close — loan approved, inspections done, movers booked — and suddenly find out that your lender won’t finalize the closing without proof of flood insurance.
Let’s unpack what’s happening, what it means for NJ homeowners and buyers, and what you can do right now to stay covered.
What Happened to the National Flood Insurance Program?
At midnight on September 30, Congress failed to pass a funding bill that would continue the NFIP’s authorization.Without reauthorization, FEMA and its participating carriers (like Hartford Flood) were forced to place the NFIP into hiatus mode — essentially a pause on new business and renewals.
Here’s what that means:
Existing NFIP policies remain active. Claims will still be processed and paid.
No new NFIP policies can be issued.
Renewals and coverage increases are on hold until the program is reauthorized.
Closings that require flood insurance could be delayed if the only option considered is NFIP coverage.
This has happened before — and usually, the program is reinstated once Congress passes a funding resolution. But that doesn’t help buyers who are trying to close on a home this week.
If you want a deeper look at how FEMA classifies flood zones in New Jersey, start here: Understanding NJ Flood Zones
How the NFIP Lapse Impacts NJ Homebuyers
If you’re purchasing a home in a FEMA-designated flood zone, your mortgage lender will require flood insurance before closing.Under normal circumstances, you’d purchase an NFIP policy through FEMA or a participating company.
But during this lapse, FEMA cannot issue new flood insurance — even if you already applied or were ready to pay.That means your closing could be delayed, your interest rate lock might expire, or your purchase agreement could be pushed back.
And understandably, that’s creating a lot of frustration for homebuyers and real estate professionals across New Jersey.
New to flood coverage? This primer helps: What Is Flood Insurance? And if you’re buying a higher-value home, see Maximum Flood Insurance Coverage for Residential Property to understand NFIP limits vs. private options.
The Good News: Private Flood Insurance Is Still Available
Here’s where Overmyer Insurance Agency (OIA) steps in.
While the NFIP is paused, the private flood insurance market is still open for business — and we can help you bind coverage immediately.
At OIA, we work with several private flood carriers, including Neptune Flood, that can:
Issue new flood policies the same day
Offer comparable or broader coverage than NFIP
Provide lender-accepted documentation for your mortgage closing
Often deliver more competitive pricing
Private flood insurance isn’t a second-tier option — it’s a fully recognized alternative that many of our clients prefer even when the NFIP is active.
Want to compare approaches? Read our overview posts above, then we’ll quote private options (including Neptune) alongside NFIP when it’s back online. (Neptune overview: neptuneflood.com).
If you’re in Union County and nearby towns, our local page is a handy resource: Cranford, NJ Flood Insurance
What About Current Homeowners?
If you already have an active NFIP flood insurance policy, your coverage continues uninterrupted.
Claims are still being processed and paid.
Your policy remains valid during the shutdown.
You just won’t be able to make coverage changes or finalize renewals until NFIP reauthorization passes.
If your renewal date falls within the lapse, you can still get coverage through a private flood carrier to avoid any potential gap.In fact, many homeowners choose to switch permanently once they compare private flood coverage options and see the difference in flexibility.
If you’re concerned about coverage gaps or renewal timelines, our post How Often Should You Review Your Homeowners Insurance? explains when and why to review policies.
What You Can Do Now
Whether you’re closing on a new home or currently insured through NFIP, here’s what we recommend:
Check your flood zone. Use FEMA’s maps or contact us — or start with our guide: Understanding NJ Flood Zones
Ask your lender if private flood insurance is acceptable.Most lenders accept private policies that meet or exceed NFIP standards. We can provide documentation if needed.
Contact OIA for same-day private flood quotes.We can provide options through Neptune Flood and other trusted markets to ensure your coverage — and your closing — stay on track.
Stay informed.NFIP reauthorization could come at any time, but don’t wait on Washington. Flood risk doesn’t take a break during a shutdown.
If you want more related reading, browse our blog: oianow.com/blog
OIA’s Expert Take
At Overmyer Insurance Agency, we help homeowners and buyers across New Jersey stay protected — even when the government can’t make up its mind.
We understand the urgency that comes with real estate closings, lender requirements, and the peace of mind that flood coverage provides.That’s why we partner with reliable private carriers like Neptune that can deliver fast, lender-approved coverage without interruption.
The Bottom Line
While FEMA’s NFIP is temporarily paused, you still have options.Private flood insurance is available right now — and can keep your home protected and your closing on schedule.
Don’t let Congress delay your move. Reach out to Overmyer Insurance Agency (OIA) today to get your private flood insurance quote and keep your plans moving forward. You can start on our homepage: oianow.com to get your private flood insurance quote and keep your plans moving forward.
Call us at 908-476-8685 or visit www.oianow.com to request your flood insurance quote today.
Comments