By Karen Wall, Patch Staff
New Jersey’s two U.S. senators and fellow members of Congress are hoping to help hundreds of thousands of residents dealing with flood insurance problems nine years after Superstorm Sandy.
NEW JERSEY — A month into the rollout of a new flood insurance rate structure, there is a congressional effort to reform the program that is expected to dramatically increase flood insurance rates.
The Federal Emergency Management Agency’s Risk Rating 2.0 changes how flood insurance rates are calculated. Instead of basing it solely on a property’s elevation, the new system looks at flooding frequency, types of flooding, and distance to a water source, along with the cost to rebuild, FEMA says.
U.S. Senators Robert Menendez and Cory Booker, along with a bipartisan group of lawmakers from coastal states, say the new ratings system could drive rates to levels that lead 900,000 homeowners dropping flood insurance altogether — according to FEMA’s own analysis of Risk Ratings 2.0.
On Tuesday Menendez and Sen. Bill Cassidy (R-Louisiana) introduced the National Flood Insurance Program Reauthorization and Reform Act. Read more: opens in a new windowNJ Lawmakers Back Plan To Make National Flood Insurance Cheaper
That bill comes after the opens in a new windowsenators sent a letter to FEMA urging the agency to pause implementation of the opens in a new windowRisk Rating 2.0 program because of concerns about how much rates will rise.
“FEMA has suggested once a policy has reached its full-risk rate, increases would stop,” the senators said. “However, these estimates assume the status quo and it seems unlikely that underlying risk factors would not increase over the next decade, potentially putting policyholders on track for high increases for years to come as a result.”
The Menendez-Cassidy bill would address not only the issues of cost, but includes more funding for mitigation, which supporters say is where the real attention needs to be paid.
“Risk Rating 2.0 is like being poked in the eye with a stick,” said Amanda Devecka-Rinear of the New Jersey Organizing Project, which has been pushing for reforms to and support for the National Flood Insurance program, along with other issues affecting New Jersey residents in the wake of Superstorm Sandy nine years ago, as well as the North Jersey flooding from Tropical Storm Ida.
Instead of addressing mitigation, “the most logical thing in the world,” she said, “FEMA says we’re just going to adjust how we charge” for flood insurance.
“We need more money for mitigation,” said Paul Jeffrey, who lives in the Ortley Beach section of Toms River, which was devastated when Sandy made landfall on Oct. 29, 2012. “We need to get homes elevated before there’s an event.”
Jeffrey said the money that was offered after Sandy, $40,000, wasn’t nearly enough to cover the costs of elevating a home, which cost him and many of his Ortley neighbors upwards of $100,000.
What’s worse, he said, is “right now you can’t get the $40,000 to elevate unless you’ve been flooded.”
“Why do we have to wait until we have a storm to get help?” Devecka-Rinear said.
She agreed with Jeffrey, that more needs to be done to help people with mitigation measures. After Sandy, money was offered as grants that paid up to 75 percent of the cost of elevation, but they were not accessible to everyone because homeowners had to pay the expenses out of pocket first.
“If you didn’t have $150,000 handy, or someone you could borrow it from, you were out of luck,” said Devecka-Rinear, who faced the issue personally with her home in Ocean County.
The new bill prioritizes properties that have flooded multiple times, to help people get out of that cycle of loss and rebuilding. But there’s more that needs to be done, she said. Lots of work has been put into building up the dunes on the oceanfront, but towns need assistance with other projects that prevent damage and promote resiliency.
“We need protection for the working class back bay families,” she said.
“It’s not like anyone wants to be a sitting duck,” she said. “I think most people would want to have a safer home but they don’t have the money to do it.”
FEMA’s answer, Risk Rating 2.0, doesn’t address that issue. Nor does it address the affordability, despite how FEMA touts the premium decreases for some policyholders, they said.
Jeffrey, a former president of the Ortley Beach Voters and Taxpayers Association, said he has been taking the FEMA-offered course for insurance agents on Risk Rating 2.0 to get a better understanding of the program. He said the Menendez-Cassidy bill includes a provision that adjusts the cost of the insurance to the income.
Someone who owns a million-dollar home on the barrier island at the Jersey Shore is most likely much more able to pay a higher insurance rate than someone who is living in a modest home along the mainland portion of Barnegat Bay, Jeffrey said.
Yet the new FEMA program — which went into effect for new policies Oct. 1 and begins to take effect for renewals after April 1 — makes no allowances for that, he said.
“I’m expecting my rate to double,” said Jeffrey, adding that his policy is up for renewal in May.
He also has concerns about the information the new system uses to determine rates.
“What if the data’s wrong? How do you go about correcting it or how do you even know if it’s wrong,” Jeffrey said. FEMA has so far refused to give out what the actual insurance costs will be for homeowners under the new program.
“This bill is a fair, affordable, forward-looking bill,” Devecka-Rinear said.