Eight U.S. senators from coastal states – including Sens. Bob Menendez and Cory Booker (both D-N.J.) – have laid out a framework for sweeping reforms to the National Flood Insurance Program. Last week the lawmakers introduced comprehensive, bipartisan legislation to extend the NFIP for six years while instituting modifications to address the system’s faults.
“Americans deserve a National Flood Insurance Program that is sustainable for taxpayers, affordable for homeowners, and accountable to everyone,” Menendez stated. “If we want a more sustainable system, the answer isn’t to slam homeowners with even higher premiums. This legislation puts the lessons we learned after Superstorm Sandy into action, levels the playing field for policyholders, and attacks the NFIP’s rampant waste and abuse to create real savings and greater investment in mitigation and resiliency efforts to make our residents and communities safer.”
The bill is also cosponsored by Sens. John Kennedy (R-La.), Chris Van Hollen (D-Md.), Marco Rubio (R-Fla.), Elizabeth Warren (D-Mass.), Thad Cochran (R-Miss.) and Bill Nelson (D-Fla.).
Menendez, chair of the Sandy Task Force and a senior member of the Senate Banking Committee that oversees the NFIP, pointed out that many property owners are forgoing flood insurance because of rising premiums coupled with the headache, or nightmare, of dealing with the federal program following a natural disaster.
The new proposal, the senators say, would reduce costs for policyholders, while upping the amount spent to prevent damage from future storms. Menendez’s press secretary, Steven Sandberg, explained, “The Sustainable, Affordable, Fair, and Efficient (SAFE) National Flood Insurance Program Reauthorization Act of 2017 tackles systemic problems with flood insurance, puts it back on solid fiscal ground, and reframes our nation’s entire disaster paradigm to one that focuses more on prevention and mitigation to spare the high cost of rebuilding after flood disasters.
“Congress must reauthorize the NFIP, which expires on Sept. 30, 2017.”
As Booker noted, “This legislation takes common sense steps toward making coverage more affordable, extending coverage to those who need it most, and investing in pre-disaster flood control and mitigation efforts that will help protect New Jersey families.”
SAFE NFIP addresses critical problems with the program – administered by the Federal Emergency Management Agency – following Sandy and other disasters, including: unsustainability, low participation rates, inaccurate flood maps, an indifference to the benefits of flood control infrastructure, agency mismanagement, unsustainable debt service costs and contractor profiteering.
In addition to reauthorizing the NFIP for six years, the act would cap annual premium increases at 10 percent, fundamentally revamp the claims process, provide for increased training and certification of agents and adjusters, expand Increased Cost of Compliance coverage, authorize funding for technology for more-accurate flood risk mapping, and ensure investment in mitigation efforts, among other reform measures.
The act has the support of several experts and flood victim advocates, including Susan Marticek, executive director of the Ocean County Long-Term Recovery Group, who believes the legislation “takes into account all of the hard-learned lessons from Sandy, and implements changes that will directly benefit policyholders in the aftermath of a disaster and expedite recovery for the individual as well as the community at large.”
“The pre-disaster aspects of this bill will go a long way to make our communities more resilient and save a tremendous amount of tax dollars in disaster recovery aid,” Marticek added. “The post-disaster reforms show the admirable degree to which Sen. Menendez truly listened to the advocates and Sandy victims on the ground, carrying those lessons into his bill to ensure that disaster victims are at the center of FEMA’s response, and that the failures of the NFIP claims process following Sandy are not replicated in the future. We fully endorse this bill and need it now more than ever.”
Amanda Devecka-Rinear, director of the New Jersey Organizing Project, said the measure is “forward-looking and invests in mitigation and prevention to safeguard families from losing everything, to ensure protection from flood disasters isn’t out of reach, and to make rates more affordable.”
“Flood insurance works only when policyholders’ claims are paid fully and promptly in case of loss,” noted Jay M. Feinman, distinguished professor of law at Rutgers Law School. “This bill gives insurance consumers a fair claims process and effective remedies to guarantee them the protection they have purchased. The reforms in this bill are essential to restore the integrity of the program and keep its promises.”
“This is what bold legislation looks like,” stated George Kasimos, president and founder of StopFEMANow. “Sen. Menendez never forgot the Sandy victims and those along the shore in need of relief. This proposed bill covers all the reforms needed to the NFIP. It is the most policyholder-friendly bill being proposed yet it is fiscally responsible to the budget. This is evident by the widespread support on both sides of the aisle.”
Menendez, who chaired the Sandy Task Force with Booker and Sens. Charles E. Schumer and Kirsten Gillibrand (both D-N.Y.), first exposed the widespread lowballing of flood insurance claims during congressional hearings in 2014, and last year successfully pushed FEMA to reopen every Sandy flood insurance claim for review. The claims review has since compensated Sandy victims more than $230 million in additional payments they were initially denied, Sandberg pointed out.
Menendez authored the Superstorm Sandy Relief and Disaster Loan Program Improvement Act, signed into law last November, which extended and expanded access to federal disaster loans through the U.S. Small Business Administration. The senator’s Homeowner’s Flood Insurance Affordability Act, meanwhile, was signed into law in 2014 to address the skyrocketing rates many Sandy survivors encountered. In 2013, Menendez shepherded the original $60 billion federal Sandy aid package through Congress.
Now, as Warren wrote in an op-ed she, Menendez, Kennedy, Van Hollen, Rubio and Cochran penned for the Wall Street Journal, “It’s time to come together to pass a long-term, bipartisan NFIP reauthorization that makes much-needed reforms to the flood insurance program. Our bill will make changes that extend affordable flood insurance protection to everyone who needs it and that places more emphasis on better flood mapping, prevention, and resiliency.”
— Juliet Kaszas-Hoch