Flood Insurance Enrollment Declines in NY and NJ

National Flood Insurance Program policy counts in New York and New Jersey have dropped significantly since 2012.

Updated on Oct. 30, 2026 in Insurance

Isometric editorial illustration of a lone residential concrete foundation pillar partially submerged in calm water, depicting property risk. — New York and New Jersey have seen a 12.2% drop in federal flood insurance enrollment since 2012, as rising premiums drive policyholders away. AI Illustration. Upload story photo >

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Is now a good time to adjust your household's flood insurance coverage given rising premium costs?

As of August 2026, New York and New Jersey recorded 50,000 fewer National Flood Insurance Program (NFIP) policies compared to 2012. This represents a 12.2% decline in combined enrollment across both states.

Why it matters

Rising premiums under FEMA's Risk Rating 2.0 methodology have prompted many residents to abandon federal coverage. Affordability concerns and misconceptions regarding flood exposure are leading policyholders to seek private alternatives or drop insurance entirely.

New York held 163,156 NFIP policies in August 2026, marking a 3.5% decrease from 2012, while New Jersey counts fell by 18.4% to 192,559. Private flood insurance policies have roughly doubled since 2020.

The players

FEMA

The Federal Emergency Management Agency manages the National Flood Insurance Program and the Risk Rating 2.0 methodology.

Moody's

This financial services company provides credit ratings, research, and risk analysis for global capital markets.

The details

Policyholders are increasingly choosing to shop for private market alternatives or are actively reducing their coverage limits to manage costs. This shift occurs despite persistent flood risks highlighted by past events like the remnants of Hurricane Ida in 2021.

2012: Superstorm Sandy occurs and establishes the NFIP policy count baseline.
2020: Private flood policy growth comparison period begins.
2021: Hurricane Ida remnants cause significant inland rainfall flooding.
August 2026: NFIP policy counts are measured for the report.
October 28, 2026: Moody's publishes flood risk analysis.

Market Dynamics

The implementation of FEMA's Risk Rating 2.0 methodology has fundamentally altered how homeowners in the Northeast assess the value of federal flood coverage. This shift mirrors broader trends where actuarial adjustments to government programs force consumers toward private market competition.

Homeowners should review their current flood coverage limits and compare federal options against private insurer rates to ensure financial protection. Reliance on government assistance in place of formal insurance remains a significant risk for property owners in flood-prone areas.

The takeaway

Property owners should treat flood insurance as a critical long-term expense rather than an optional safeguard. Evaluating current risks against potential out-of-pocket losses is essential when deciding between federal and private market coverage options.