Federal catastrophe reinsurance proposals

No federal catastrophe reinsurance program for homeowners exists today. Several bills in the 119th Congress would create one, either by selling reinsurance to insurers directly or by guaranteeing the debt and reinsurance of state programs. As of October 24, 2026, Congress.gov shows each of them still in the committee it was referred to, with no further action. None has passed either chamber, and nothing here predicts that any will become law.

Whether any version helps your premium depends on how much of your price is reinsurance, which varies by state and company. The mechanics are in reinsurance costs and your premium.

The problem the proposals aim at

Insurers buy reinsurance to protect themselves against catastrophe losses, and in disaster-prone states that cost is part of what policyholders pay. When reinsurers raise prices after bad years, insurers file for higher rates, cut back in risky areas, or leave. Supporters of a federal backstop argue that the biggest events, hurricanes, wildfires and severe convective storm outbreaks, are too large and too correlated for private capital to price affordably. Opponents argue the federal government would absorb risk that should be priced.

There is a market context for the debate. Reinsurance prices softened in 2025 and 2026, with Florida's June 1 renewals reported down roughly 10 percent in 2025 and 15 to 25 percent in 2026, and that has weakened one of the arguments for immediate federal action. Supporters respond that a backstop is aimed at tail events, not a single renewal season.

The main proposals

Status is from Congress.gov as of October 24, 2026 and can change. The descriptions summarize the bill text and are not a legal reading.

The INSURE Act

According to the bill text, S. 2349 would direct the Treasury Secretary to create a Federal Catastrophe Reinsurance Program and a Federal Catastrophe Reinsurance Fund. Coverage would phase in for wind and hurricane, severe convective storm and wildfire, and flood, with earthquake possible later. Insurers would pay quarterly premiums based on expected losses, administrative costs and a trend factor. In return the federal program would cap an insurer's liability above a threshold. The bill sets that threshold at no more than 40 percent of each participating insurer's probable maximum loss for each covered peril. Claims Journal reported that the program would start with $50 billion in federal funds; we did not find that figure in the introduced text. Participating insurers would have to offer all-perils property coverage and take part in loss-prevention partnerships with policyholders.

The all-perils condition matters. An insurer taking part could not simply sell wind-only or exclude flood; the design tries to tie the subsidy to broader coverage and mitigation.

The Homeowners' Defense Act of 2025

H.R. 827 works through the states rather than insurers. According to the bill text on Congress.gov, it would create a National Catastrophe Risk Consortium chaired by the Treasury Secretary, let Treasury guarantee debt issued by eligible state insurance programs (capped at $3.5 billion for earthquake and $17 billion for other perils), and sell one-year reinsurance contracts only to eligible state programs, covering 80 to 90 percent of insured losses above a retained-loss threshold at actuarially sound prices. Eligible programs would need to charge premiums sufficient to cover expected costs, avoid cross-subsidies, and support mitigation. The bill also directs a share of the fund's investment income to HUD mitigation grants. State programs would not be able to cover properties in special flood hazard areas. This is the model closest to a federal backstop for Citizens in Florida or the California FAIR Plan.

The Natural Disaster Risk Reinsurance Program Act

H.R. 6274 would set up a Natural Disaster Risk Reinsurance Program in the Treasury for covered events on or after January 1, 2026 (bill text). States would choose whether to join. After a covered event, Treasury would pay a participating state the amount by which industry-wide insured losses in the state exceed that state's trigger amount, which the National Academy of Sciences would propose and Treasury would approve. The trigger can be no higher than the state's total direct written premium for covered insurance. A participating state would have to keep insurers paying claims up to the trigger, pass the federal money to insurers by losses and market share, and pledge its full faith and credit to repay Treasury within 10 years. Rep. Moskowitz's release describes the money as post-event bonds repaid through a temporary surcharge that applies only after a catastrophe. The release cites independent estimates of roughly 25 percent rate reductions in Florida and describes the measure as budget-neutral; those estimates could not be independently verified, so treat them as the sponsor's claim.

The think-tank version

Outside Congress, the Brookings Institution's Hamilton Project has proposed a federal reinsurer, "US Re," that would use federal borrowing capacity to cover severe natural catastrophe risks. It is a policy paper, not a bill.

Arguments on each side

For a federal backstop

• Catastrophe risk is correlated across a state or region, which is what makes it expensive to insure privately.
• The federal government can borrow at lower cost and spread losses across the whole country and over time.
• There are precedents: the NFIP covers flood, and the Terrorism Risk Insurance Program backs commercial insurers for certified terrorism losses.
• Lower reinsurance costs could reduce premiums and keep insurers in states they might otherwise leave. See why insurers are pulling out of states.

Against

• The American Property Casualty Insurance Association (APCIA) said of the INSURE Act that it would shift risk to taxpayers without solving core market issues and would make policyholders in low-risk states subsidize high-risk ones.
• Critics worry it subsidizes development in hazardous places and weakens price signals that encourage mitigation.
• Reinsurers have raised concerns about competition with private capital.
• The NFIP's own history shows how a federal risk program can carry large debt and short-term reauthorizations (NFIP reauthorization and what a lapse means for you).
• A backstop does not address other premium drivers such as repair costs, litigation and building patterns.

State precedents

The closest working model is at the state level. Florida's Hurricane Catastrophe Fund, a state reinsurance program for insurers, was created after Hurricane Andrew; see Florida Hurricane Catastrophe Fund and Florida. California's FAIR Plan can assess member insurers when losses exceed its resources, as in the $1 billion assessment ordered in February 2025 (California). Federal proposals would add a layer above such mechanisms, which is why they are often pitched for state residual markets like FAIR plans.

How to follow this

1. Check the bill page. Search the bill number on Congress.gov for the latest action, cosponsors and text.
2. Look for a cost estimate. A Congressional Budget Office score tells you what the sponsors' claim of budget neutrality is worth. S. 2349 did not include one in the version reviewed.
3. Ask what is guaranteed. Debt guarantees, reinsurance contracts and direct appropriations carry different federal risk.
4. Check which insurers or states qualify. Participation rules decide whether a program touches your policy at all.
5. Do not wait for it. None of this changes your renewal. Keep shopping and mitigating as in the home insurance affordability crisis: what the data show.

Key takeaways

• No federal catastrophe reinsurance program for homeowners exists; as of October 24, 2026 the INSURE Act (S. 2349), the Homeowners' Defense Act (H.R. 827) and the Natural Disaster Risk Reinsurance Program Act (H.R. 6274) are all still in committee.
• The INSURE Act would put federal reinsurance behind insurers, while H.R. 827 would back state programs.
• Supporters point to correlated catastrophe risk; opponents point to taxpayer exposure and cross-subsidies.
• Reinsurance prices have recently fallen, which changes the urgency but not the underlying debate.
• Verify current status on Congress.gov; bills can change or stall.