Suggestion being considered by the White House
Trevor Burgess, CEO of Neptune Flood. Courtesy, Wikipedia
The New York Times reports that private flood insurance provider Neptune Flood has proposed to White House officials that the private sector could take over a vast majority of policies from the beleaguered National Flood Insurance Program (NFIP).
During meetings at the White House and the Treasury Department this past fall, Neptune Flood CEO Trevor Burgess was confident that the private sector could take on 95% of the 4.7 million current NFIP policies, alleviating the debt and mounting risk to the government and taxpayers. The program, part of FEMA, is $22 billion in debt even after $16 billion in debt forgiveness. That has led many to question the efficacy of the program and shift their hopes towards the private insurance market. Burgess reportedly suggested the NFIP stop writing new policies and let the private flood insurers take all but the most very risky policies – essentially making the NFIP an insurer of last resort. The Times reports the idea received serious attention at those meetings.
Neptune Flood, based in St. Petersburg, works largely as a middleman, assessing flood risk nationwide and connecting property owners with one of their 39 “risk taking partners” who write policies – often times at lower rates than their NFIP counterparts, who they contend still use outdated flood maps when setting premiums. As of September 2025, Neptune had more than 260,000 policies in force nationwide.
Their secret? Using AI to streamline flood modeling, setting premium prices on an individual property basis. Accurate modeling improves insurer profitability thereby increasing the overall availability of coverage. Still, the Times reports, many are leery of a fully privatized flood insurance market because of the looming threat of a catastrophic flood event. “When someone has a private policy and gets one claim, the private insurer dumps them,” Chad Berginnis, executive director of the Association of State Floodplain Managers, is quoted. This could prove troublesome for states like Florida: An analysis from the Florida Policy Institute states that NFIP payouts to Floridians made up 50% of the federal disaster aid received by Florida in 2025.
The current NFIP landscape and that of parent FEMA, which the White House is proposing to overhaul to be leaner and more efficient, is leaving much to be desired. The Miami Herald reports that the NFIP’s Risk Rating 2.0 system has led to widespread premium increases, with nearly 300,000 policy cancellations since its 2021 rollout. While high rates are reflective of high risk, disincentivizing construction in flood-prone areas, those homeowners most likely to drop their NFIP policies were lower income residents facing the highest price increases. Without coverage, the costs of disaster are simply shifted to the general taxpayer. However, Florida stands out as being one of the only states adding policies during the past four years, nearly 100,000 of them – generally attributed to the flood insurance mandate on homes with Citizens Property Insurance policies. Today, Florida has one-third of all NFIP policies, even as the number of private companies writing here has grown from 37 to 57 over the past two years.
While short-term authorizations keep providing NFIP a lifeline, there’s bipartisan consensus that the emerging problem is far too expensive in the long term. Even as its policy count has shrunk, its costs have grown. Some experts call for a balance between the NFIP and Neptune Flood’s proposed future, an insurance landscape where private insurance companies can help keep the market competitive, allowing homeowners different coverage options, without leaving all of the high-risk properties to the federal flood program.
See you on the trail,
Lisa
LMA Newsletter of 1-20-26
