NFIP Monthly Payment Plan FAQs
Effective November 4, 2024, the National Flood Insurance Program (NFIP), managed by FEMA, announced a new payment option for policyholders. Traditionally, flood insurance premiums had to be paid in full annually. However, FEMA is introducing an installment plan, allowing policyholders to spread their annual premium across monthly payments. Below are answers to common questions about this new option.
What are installment payment plans?
Installment plans enable policyholders to divide their annual flood insurance premium into smaller, recurring monthly payments. Since the NFIP’s inception over 55 years ago, annual premiums were required to be paid in full upfront. Now, FEMA is transitioning to allow both new and renewing policyholders to select monthly payments instead. This change affects payment schedules but not the coverage term of the policy.
Who can use the installment plan?
The option is available to policyholders who are not required to escrow their premiums. Both new applicants and renewing policyholders may choose to pay premiums either in full or via 12 monthly installments. Once a payment plan is selected, it cannot be altered during the policy term.
Are there additional fees for using an installment plan?
No additional fees will be applied for choosing the monthly installment option. Although FEMA must collect standard NFIP fees, surcharges, and assessments as mandated by federal law, these remain unchanged with the new payment option. For those opting for monthly installments, the first payment will include the initial monthly premium along with all applicable fees, surcharges, and assessments. Subsequent monthly payments will consist of premium-only amounts.
When will installment plans become available?
FEMA is actively working with NFIP insurers to implement this option. On November 1, 2024, FEMA published a final rule for the "National Flood Insurance Program Installment Payment Plan," in the Federal Register removing regulatory obstacles to installment plans. With these barriers addressed, FEMA and its partners are making operational adjustments and will share updates as they finalize details.
How do I sign up for the installment plan?
Once the installment payment option is fully operational, NFIP insurers and agents will provide it to new applicants and renewing policyholders. To participate, eligible policyholders must authorize automatic electronic payments, such as via a bank account or credit card. To streamline the process and minimize administrative costs, all communications and transactions related to installment payments will be conducted electronically.
Please reach out to us if you have questions about your flood insurance policy or need to seek advice about getting coverage for flood insurance. You can also visit the FEMA website for Flood Insurance information or the NFIP website for more information.