NFIP Instalments: Which Flood Policies Can Pay Monthly

See the primary source.

FEMA's National Flood Insurance Program installment payment plan rule at 89 FR 87299 has been in force since December 31, 2024. The Homeland Security Department rule (RIN 1660-AB16) revises 44 CFR Part 61 and 44 CFR Part 62 so eligible NFIP policyholders may pay the annual flood insurance premium in monthly installments instead of only as a lump sum. Instalments are not available to every policy class, and a missed instalment has a defined consequence in the rule.

What is in force now?

The rule is already effective. The DATES paragraph states, verbatim, "This rule is effective December 31, 2024." The document was published November 1, 2024. An independent property-and-casualty agency writing flood for homeowners and small landlords is operating under that live obligation today, not under a future start date.

This page is scoped to a sealed, point-in-time index of 1086 federal rules from 11 agencies, published September 1, 2023 through September 1, 2026. It is a fixed snapshot, not a live feed. Every date, citation, RIN, CFR reference, and figure below is copied from that snapshot or from the linked primary document.

Source: Federal Register / eCFR.

What does the rule require?

The authoritative abstract states that the NFIP is a voluntary program in which interested persons can purchase flood insurance for their property if it is located in a community that participates in the NFIP by adopting and enforcing a set of minimum floodplain management requirements. FEMA is revising the NFIP's regulations to offer NFIP policyholders the option of paying their annual flood insurance premium in monthly installments.

Revised 44 CFR Part 61 states that FEMA will not issue or renew flood insurance unless FEMA receives the full amount due, which is either presentment of the full premium or presentment of the first of a series of monthly premium installment payments, and presentment of the full amount of surcharges, fees, and assessments, plus a complete application. The first instalment is not a partial premium alone. Surcharges, fees, and assessments are due up front with that first payment.

The preamble describes the payment schedule as 11 to 12 payments over the course of the year. A footnote in that analysis states that customers will make 11 payments in their first year due to a 30-day waiting period for initial enrollment, and that following years will have 12 monthly payments. The regulation text itself requires a series of monthly premium installment payments; it does not invent a different cadence.

Write-Your-Own companies are not optional participants in the offer. Revised 44 CFR Part 62(h)(7) states that premium payment plans must be offered by the WYO Company under the terms prescribed by the Administrator in the applicable section(a)(1). An agency that treats WYO flood as if instalments were still a company-by-company courtesy is reading the superseded authorization, not the current requirement.

Which flood policies can pay monthly?

Instalments are not available to every policy class. The statutory mandate that FEMA implemented applies to NFIP policyholders who are "not required to escrow their premiums and fees for flood insurance as set forth under section 102 of the Flood Disaster Protection Act of 1973." Policyholders who already pay flood premium into an escrow account with the same frequency as the loan payment are outside that option as the rule describes it.

The economic analysis states that the installment plan option is available for residential and non-residential Standard Flood Insurance Policy policyholders. It also states that Group Flood Insurance Policies are not included in the population of policyholders that will pay monthly, because a GFIP is paid as a one-time amount withheld from Other Needs Assistance. Condominium association policies are discussed in that analysis as a class FEMA does not expect to use instalments, but the rule does not say those associations are forbidden from asking; it says FEMA does not expect them to utilize the plans.

A producer who maps every dwelling, every commercial SFIP, every GFIP, and every association master the same way is not following the classes the rule names. The eligible set is narrower than "any flood policy on the books."

The rule does not say what a private flood product outside the NFIP may do. This page covers the NFIP rule at 89 FR 87299 only.

What happens if an instalment is missed?

A missed instalment has a defined consequence in the rule. Revised 44 CFR Part 61(b) states that FEMA will not reduce coverage or reform the policy for any policyholder who makes timely installment payments. In the event of a claim occurring prior to a policyholder completing all installment payments, the policyholder must remit the balance of payment and may settle that balance out of claim proceeds in accordance with the Standard Flood Insurance Policy.

If the policyholder fails to make all installment payments, 44 CFR Part 61(b)(2) states that FEMA shall require payment in full in the next policy term. The preamble also notes that current SFIP terms provide an opportunity to cure a missed or additional payment and avoid reductions in coverage or policy reformation. The rule does not say a producer may waive the next-term full-pay consequence. The rule does not state a civil-penalty dollar amount for a missed instalment.

That pair of consequences is the operational differentiator. Eligibility is class-limited. The schedule is monthly, with surcharges, fees, and assessments due on the first payment. A miss can be cured under existing SFIP terms, a claim mid-plan requires the remaining premium, and a failure to complete the series forces full pay at the next term.

Who has to comply?

The rule binds FEMA, NFIP Direct, and Write-Your-Own companies that sell federally backed flood insurance. An independent agency is not named as the regulated issuer, but it is the party that explains the option, takes the application, and reconciles the book against what the carrier will actually bill. The abstract is about NFIP policyholders and the option to pay the annual premium in monthly installments. The WYO revision in 44 CFR Part 62 is about companies that must offer the plan under FEMA's terms.

For a producer, the live work is classification and disclosure, not rewriting FEMA's billing engine. Each flood policy either is or is not in a class the rule treats as eligible. Each eligible policy either is or is not being offered the monthly series on the terms in the applicable section. Each WYO appointment either is or is not presenting that offer.

The rule does not say the agency must collect the instalments itself. The rule does not say how an agency management system must store the payment plan. Those operational choices sit with the agency and the WYO, subject to the regulation text.

Where do insurance agencies commonly fall short?

Agencies commonly treat flood billing as an annual-only product because that is how the book ran before December 31, 2024. Renewal letters, proposals, and producer scripts still say the full premium is due at application or renewal even when the insured is not in escrow and is writing a residential or non-residential SFIP.

A second pattern is class confusion. Producers offer monthly pay on a GFIP, or they refuse monthly pay on a non-escrowed dwelling SFIP, or they assume a condominium association is automatically in or out without reading the class discussion in the Federal Register document. The rule names classes. A generic "flood can be monthly now" line does not.

A third pattern is silence on the miss. The agency sells the convenience of monthly pay and does not record that a completed miss forces payment in full in the next policy term, or that a claim before the series is finished requires the remaining premium. That is not a marketing preference. It is 44 CFR Part 61(b).

A fourth pattern is WYO drift. Some companies were authorized, but not required, to offer plans before this rule. The current text requires the offer under FEMA's terms. An agency that waits for each WYO to "roll it out in their own way" without checking the actual offer against the applicable section(a)(1) is reconciling to a superseded posture.

This page does not cite enforcement counts. Those figures are not in the closed fact set. The patterns above are operational, not a claim about any agency's examination history.

How can an agency self-audit the flood book now?

Run the book against the rule, not against memory of last year's invoice.

1. Pull every in-force NFIP policy and every flood application in the pipeline, and tag the form: dwelling SFIP, non-residential SFIP, condominium association, or GFIP.

2. Tag escrow status against section 102 of the Flood Disaster Protection Act of 1973 as the rule uses that line: required to escrow, or not.

3. For each non-escrowed residential or non-residential SFIP, record whether the WYO or NFIP Direct offered the monthly series on the terms in 44 CFR Part 61, including up-front surcharges, fees, and assessments.

4. Compare the agency's proposal, binder, and renewal wording to that offer. Flag any document that still states full annual premium is the only path for an eligible class.

5. For any policy already on instalments, record the remaining balance rule for a claim and the next-term full-pay rule for a completed miss, and confirm those consequences appear in the file the producer can retrieve.

6. Route each exception to the producer or plan administrator who owns the renewal. Do not treat a system label as the legal conclusion.

HawkSoft is the agency management system many independent agencies use to store policy, client, and download records. EZLynx is the comparative-rater and agency-management product many of the same shops use to quote personal lines and keep a second policy record. Neither product is a substitute for reading 89 FR 87299. In the readiness pass, use HawkSoft to list flood policies and carriers, and use EZLynx to see whether the quote or proposal still presents a single annual premium for a class the rule treats as eligible for monthly pay. A human producer decides whether the insured is in escrow, whether the form is a GFIP, and whether the WYO offer matches FEMA's terms.

Related operational reading on this site includes the insurance compliance documentation checklist, the eight-step insurance policy renewal workflow, and the insurance policy-change processing case study. Those pages are about agency process. This page is about the flood instalment rule.

What can be automated and what needs a person?

Reconcile the book of business against the change: each policy maps to the notice, form, or disclosure the rule now requires and the date it is due. US Tech Automations flags policies still carrying the superseded annual-only wording and routes the renewal or amendment to the producer.

That is the whole of the software role here. A workflow can list flood policies, compare proposal language to a current template, and open a task when a WYO download does not show an instalment offer on an eligible class. A workflow cannot decide whether a particular insured is required to escrow, whether a GFIP is in force, or whether a missed payment has been cured under the SFIP. Those are human decisions against the regulation and the policy file.

US Tech Automations may be named in an agency's runbook as the flag-and-route layer between HawkSoft or EZLynx and the producer queue. It should not be described as guaranteeing NFIP compliance. The rule requires the offer and names the consequences. The agency still owns the book.

What the rule does not say is also part of the audit. The rule does not say an agency must collect monthly payments on its own trust account. The rule does not say a private flood policy follows these terms. The rule does not state a penalty dollar figure for a producer who fails to mention the option. Where the rule is silent, write that down and stop.

Key Takeaways

• The FEMA rule at 89 FR 87299 (RIN 1660-AB16) has been effective since December 31, 2024 and amends 44 CFR Part 61 and 44 CFR Part 62.

• Eligible NFIP policyholders who are not required to escrow under section 102 of the Flood Disaster Protection Act of 1973 may pay the annual premium in monthly installments; GFIPs are not in the monthly-pay population the rule describes.

• The first payment is the first monthly premium plus the full amount of surcharges, fees, and assessments; the preamble describes 11 to 12 payments over the year.

• A policyholder who fails to make all installment payments must pay in full in the next policy term; a claim before the series is complete requires the remaining premium.

• Write-Your-Own companies must offer the plans under the terms in the applicable section(a)(1).

• Automation can flag superseded wording and route exceptions; a producer still classifies escrow, form type, and the WYO offer.

What questions come up in practice?

Can every NFIP policy go on monthly instalments?

No. The rule implements a statutory option for policyholders who are not required to escrow under section 102 of the Flood Disaster Protection Act of 1973. The analysis excludes GFIPs from the monthly-pay population. Residential and non-residential SFIPs are the classes the option is described as covering. A qualified professional should apply those classes to a particular file.

How many instalments does a policyholder make?

The regulation requires a series of monthly premium installment payments. The preamble describes 11 to 12 payments over the course of the year, with 11 in the first year because of the 30-day waiting period and 12 in following years. The rule does not say an agency may invent a quarterly schedule instead.

What is due with the first instalment?

44 CFR Part 61(a) requires presentment of the first of a series of monthly premium installment payments and presentment of the full amount of surcharges, fees, and assessments, plus a complete application. The rule does not spread those surcharges, fees, and assessments across the year.

What happens if the insured misses a payment?

The preamble notes an opportunity to cure under current SFIP terms. If the policyholder fails to make all installment payments, 44 CFR Part 61(b)(2) requires payment in full in the next policy term. If a claim occurs before all instalments are complete, the remaining premium must be remitted and may be settled from claim proceeds.

Do Write-Your-Own companies have to offer the plan?

Yes. Revised 44 CFR Part 62(h)(7) states that premium payment plans must be offered by the WYO Company under the terms prescribed by the Administrator in the applicable section(a)(1). The prior authorization-without-a-mandate text is what this rule replaced.

Can software decide that a policy is eligible?

No. HawkSoft and EZLynx can hold the policy record. A workflow can flag wording and missing offers. Eligibility under the escrow line and the form class is a human reading of the rule and the file.

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Every date, citation, RIN, CFR reference, and figure in these posts is copied verbatim from the Federal Register and eCFR as of the snapshot date. Nothing is estimated, modeled, or extrapolated. This is not legal or tax advice.

This page is for informational purposes only. It is not legal or tax advice, does not create an attorney-client relationship, and is not a substitute for the rule. Read 89 FR 87299 and the current text of 44 CFR Part 61 and 44 CFR Part 62. Consult a qualified professional about a particular agency, policy, or insured.

Last reviewed: November 1, 2024

The exception path is the agentic workflow layer.