Katy Willett of Middle Creek Insurance recently spoke with Spectrum News about how the federal government shutdown has halted the National Flood Insurance Program, leaving homeowners across North Carolina unable to purchase new flood insurance policies.
Flood Insurance “Washed Out” by Federal Shutdown — What It Means for North Carolina Homeowners
When the federal government shut down on October 1, the National Flood Insurance Program (NFIP) expired — leaving thousands of homeowners unable to purchase or renew flood insurance coverage.
For Middle Creek Insurance agent Katy Willett, this lapse has immediate consequences for families and homebuyers across North Carolina.
“Because of the shutdown, you cannot buy those policies,” Willett told Spectrum News. “If you want to close on a home in a high-hazard area, your only option is to go through private insurance. If you can find it, it’s more.”
The Impact on Homebuyers and Policyholders
The NFIP is the only option for many properties located in high-risk flood zones, and without it, real estate closings that require flood coverage are effectively frozen.
Even current policyholders could face uncertainty if a major disaster strikes during the funding lapse.
“If you have an existing policy and there’s a huge catastrophe that’s over $1 billion, they’re going to have problems paying on your existing policy,” Willett explained.
According to FEMA data, North Carolina has more than 100,000 active flood insurance policies statewide — all of which depend on federal backing. Without the NFIP, homeowners are being forced to turn to private flood insurance, which Willett notes can be five to ten times more expensive.
A Costly Alternative
“Significantly more expensive. It’s not backed by FEMA,” Willett said.
“You had a budget, you had expectations, and now you have to try to find someone to write you a policy to meet your mortgage requirements.”
Private flood insurance options are available but can vary widely in price and coverage. Middle Creek Insurance continues to help clients explore available alternatives during the shutdown.
Flooding Still a Threat in 2025
From Tropical Storm Helene to Chantal, severe weather has already caused flooding across North Carolina this year. Willett says flood insurance demand has shifted inland — writing several policies in Wake Forest and Durham, rather than only along the coast.
“This has been an unusual year for flood insurance,” Willett said. “Historically, I would have a customer buying a home on the coast. This year I’m not selling a lot of flood insurance at the beach.”
Understanding the Risk
North Carolina Insurance Commissioner Mike Causey also emphasized the importance of flood coverage.
“The shutdown highlights the significance of flood insurance because you can’t access it if you need it,” Causey said. “Before you build, understand the risk of any type of flooding.”
💡 What Homeowners Can Do
Even though the federal program is paused, private flood insurance may still be available — and Middle Creek Insurance can help compare options and find solutions during the shutdown.
📞 Contact Middle Creek Insurance today to review your flood coverage options and stay protected, no matter what happens in Washington.
