For 30-40% of current NFIP policyholders, private insurers can already offer comparable or better coverage at lower premiums. As the NFIP phases out subsidies under its Risk Rating 2.0 framework, private insurers are expected to provide more affordable options for approximately 55% of policyholders, representing half of the NFIP's premium base.

The financial strain on the NFIP further underscores the need for reform. Since its creation in 1968, the NFIP has paid $129 billion in claims (adjusted to 2024 dollars), including $112 billion for residential properties. It currently carries $20.5 billion in debt, accruing nearly $2 million in daily interest payments to the US Treasury. The report argues that expanding private market participation could reduce taxpayer burdens while making the insurance system more sustainable.