Flood Insurance: Congressional Action Could Help Increase Coverage for At-Risk Properties

Executive Summary

This GAO finding highlights a significant gap in flood insurance uptake: as of April 2026, most high‑risk properties lack NFIP coverage (86 percent unprotected), NFIP policies declined from 5.5 million in 2010 to 4.5 million in 2026, and private flood insurance accounted for 14 percent of policies in 2025. GAO also estimates about 13 million high‑risk properties lie outside FEMA’s mapped special flood hazard areas (SFHAs). GAO identified four statutory actions that could increase coverage: broaden the purchase requirement to additional flood risks, publish property‑level risk information, require lenders to provide flood insurance quotes for federally backed mortgages, and increase NFIP coverage limits. GAO reiterated prior recommendations on means‑based affordability assistance and removing barriers to private flood insurance.

Contractors across the listed market segments should pay attention now because these GAO‑identified actions would drive demand for mapping and modeling, data publication and analytics, insurance product design, lender integration, and disaster‑risk planning — and would require statutory changes that could trigger new solicitations, pilot programs, or agency implementation work. The most directly affected segments (per the event tags) are Insurance Services, Risk Assessment and Modeling, Disaster Management, Geospatial Services, Data Analytics, Financial Services, and Mortgage Services. Firms that prepare technical capabilities, partnerships, and pilot offerings aligned with property‑level risk data, private flood insurance product support, and lender‑facing quote mechanisms will be better positioned if Congress or agencies pursue any of the options GAO described.

Impact Matrix

Insurance Services

• Risk Level: Critical
• Opportunity: Increased demand for private flood insurance products and product integration services if statutory changes remove barriers and/or increase coverage limits; potential work supporting alignment between NFIP changes and private insurer offerings. Specific opportunities TBD pending solicitation language. Relevant NAICS codes (from Tags): 524126, 524130, 524210.
• Timeline: Timeline TBD pending source review.
• Action Required: Assess product portfolios for gaps relative to broader flood risk (e.g., heavy rainfall exposures), develop frameworks for private/NFIP compatibility, prepare compliance and underwriting models that can incorporate property‑level risk data, and engage with insurers and brokers about potential pilot programs.
• Competitive Edge: Build modular policy templates and claims workflows that can quickly incorporate property‑level risk inputs and interface with lender quoting mechanisms; cultivate partnerships with data/modeling vendors and local agents to accelerate market entry.

Risk Assessment and Modeling

• Risk Level: Critical
• Opportunity: Major need for expanded flood‑risk modeling that captures flood sources beyond FEMA SFHAs (notably heavy rainfall) and for property‑level risk scoring to support public data publication and insurer/lender decisioning. Specific opportunities TBD pending solicitation language. Relevant NAICS codes (from Tags): 541990, 541370, 541620.
• Timeline: Timeline TBD pending source review.
• Action Required: Validate and enhance models for heavy‑rainfall and localized flooding scenarios, prepare to supply property‑level risk outputs compatible with public dissemination, and document data provenance and uncertainty to support agency and industry use.
• Competitive Edge: Offer pre‑validated, explainable risk models and APIs that produce property‑level risk profiles suitable for public reporting, insurer underwriting, and lender quote generation; develop pilot results and case studies for rapid validation.

Disaster Management

• Risk Level: High
• Opportunity: Support for community resilience planning, post‑flood recovery coordination, and integration of enhanced risk information into preparedness programs. Specific opportunities TBD pending solicitation language. Relevant NAICS codes (from Tags): 541990, 541370 (as applicable).
• Timeline: Timeline TBD pending source review.
• Action Required: Prepare services that translate increased risk visibility into actionable mitigation and recovery plans for localities and agencies; align offerings with potential NFIP administrative changes and expanded coverage scenarios.
• Competitive Edge: Combine flood‑risk modeling outputs with on‑the‑ground mitigation planning services and grant/compliance support to help communities access funding and implement risk reduction measures.

Geospatial Services

• Risk Level: High
• Opportunity: Increased demand for updated flood maps and property‑level geospatial datasets if agencies or Congress expand mapping beyond current FEMA SFHAs and make risk information public. Specific opportunities TBD pending solicitation language. Relevant NAICS codes (from Tags): 541370, 541990 (as applicable).
• Timeline: Timeline TBD pending source review.
• Action Required: Invest in high‑resolution mapping capabilities, scalable data pipelines for property‑level outputs, and tools for translating model outputs into public‑facing maps and datasets; prepare for interoperability with agency systems.
• Competitive Edge: Deliver end‑to‑end geospatial solutions (data capture, modeling integration, public publishing tools) and demonstrate compliance with agency data standards via pilots or proof‑of‑concepts.

Data Analytics

• Risk Level: High
• Opportunity: Demand for analytics to combine NFIP/private policy data, property characteristics, and risk scores to support insurer underwriting, lender quoting, affordability analyses, and public risk transparency. Specific opportunities TBD pending solicitation language. Relevant NAICS codes (from Tags): 541990, 541620.
• Timeline: Timeline TBD pending source review.
• Action Required: Prepare to integrate disparate datasets (policy counts, private market data, model outputs), develop analytics for affordability/means‑testing scenarios, and build dashboards for stakeholders (insurers, lenders, agencies, local governments).
• Competitive Edge: Provide turnkey analytics platforms that can ingest both NFIP and private market datasets and produce regulatory‑ready summaries and affordability analyses.

Financial Services

• Risk Level: Medium
• Opportunity: Services supporting reinsurance, risk transfer, and financial products tied to expanded flood coverage or higher NFIP limits; support for program design if federal affordability assistance is considered. Specific opportunities TBD pending solicitation language. Relevant NAICS codes (from Tags): 522310, 522390.
• Timeline: Timeline TBD pending source review.
• Action Required: Monitor legislative developments and prepare product structures that can accommodate possible NFIP limit increases or affordability mechanisms; assess capital and reinsurance implications of broader coverage.
• Competitive Edge: Develop flexible financing and risk‑transfer instruments that can be quickly adapted to shifts in federal coverage policy or private market demand.

Mortgage Services

• Risk Level: High
• Opportunity: Implementation work if lenders are required to provide flood insurance quotes for federally backed mortgages—opportunities to supply quoting tools, integration services, and lender education. Specific opportunities TBD pending solicitation language. Relevant NAICS codes (from Tags): 522310, 522390.
• Timeline: Timeline TBD pending source review.
• Action Required: Prepare technical solutions for lender quoting workflows, integrate property‑level risk outputs into loan origination systems, and develop outreach materials for lender compliance and borrower communication.
• Competitive Edge: Offer lender‑facing APIs and user experience designs that automate flood‑quote generation using property‑level risk data and that can integrate into existing mortgage origination platforms.

Cross-Segment Implications

• Expanded property‑level risk data and broader mapping efforts will be a common input across Risk Assessment and Modeling, Geospatial Services, Data Analytics, Insurance Services, and Mortgage Services. Improvements or standards set in geospatial/model outputs will directly affect underwriting, lender quoting, and public transparency efforts.
• If lenders are required to provide flood insurance quotes, Mortgage Services vendors will need tight integration with insurers and modelers — creating demand for joint solutions linking Mortgage Services, Insurance Services, and Data Analytics providers.
• Any moves to increase NFIP coverage limits or provide means‑based affordability assistance would affect Financial Services (risk transfer and capital), Insurance Services (product design), and Disaster Management (recovery funding assumptions), meaning contractors should coordinate capabilities across these domains.
• Growth in the private market (already offsetting NFIP declines per GAO) signals business opportunities for private insurers and reinsurers, but also increases the need for standardized, transparent risk data and regulatory clarity — a cross‑segment coordination need encompassing agencies listed in the Tags.