Menendez Statement on Flood Insurance Extension
Menendez Statement on Flood Insurance Extension
Menendez has been rallying support for his bipartisan flood insurance reform legislation, but Republican leadership decided to kick the can down the road.
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), chair of the Sandy Task Force and a senior member of the Senate Banking Committee that oversees the National Flood Insurance Program (NFIP), today celebrated the extension of the National Flood Insurance Program until November, but also lamented that a larger reform of the program wasn’t taken up by Republican leadership. Menendez is the author of the Safe NFIP Act, which proposes sweeping reforms to address the waste, abuse and mismanagement plaguing the system that led to delayed recovery for Sandy survivors.
“While I’m happy Congress acted in time to avoid a lapse of the flood insurance program, which would have roiled the housing market and left thousands of New Jerseyans without coverage during hurricane season, we can’t continue to kick the can down the road and continue the status quo,” said Menendez. “Congress needs to take up and pass my SAFE NFIP Act, which provides a long-term reauthorization, makes premiums more affordable, reduces future flooding by investing in resiliency on the front end, and holds insurance companies accountable by putting policyholders first. This is the most comprehensive, bipartisan piece of legislation in the Senate with four Republican cosponsors and five Democratic cosponsors. It’s time for Republican leadership to take up our bill and allow our bipartisan coalition to fix this program so it’s sustainable for taxpayers, affordable for policyholders, and fair and efficient for everyone.”
Menendez’s reform bill, 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.
Sen. Menendez and Rep. Pallone stood today on the Union Beach waterfront at a news conference with Mayor Paul Smith, local officials, advocates and Sandy survivors.
SAFE NFIP addresses critical problems with the program, administered by the Federal Emergency Management Agency (FEMA), following Superstorm Sandy and other disasters: 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.
The bipartisan Senate bill led by Sens. Menendez and John Kennedy (R-La.) is cosponsored by Booker, Chris Van Hollen (D-Md.), Marco Rubio (R-Fla.), Elizabeth Warren (D-Mass.) Thad Cochran (R-Miss), Bill Nelson (D-Fla.), Bill Cassidy (R-La.) and Jack Reed (D-R.I.). The bipartisan House bill is cosponsored by Reps. Pallone, Pascrell, Albio Sires (D-N.J.-08), Bonnie Watson Coleman (D-N.J,-12), Donald M. Payne, Jr. (D-N.J,-10), Mike Johnson (R-La.), Gregg Harper (R-Miss.-3), Steven Palazzo (R-Miss.-4), Charlie Christ (D-Fla.-13), Carlos Curbelo (D-Fla.-26), Alcee Hastings (D-Fla.-20), and Clay Higgins (R-La.-3).
The Sustainable, Affordable, Fair, and Efficient (SAFE)
NFIP Reauthorization Act of 2017
Long-Term Certainty. Reauthorizes the NFIP for six years, providing certainty for communities.
No Exorbitant Rate Hikes. Ends runaway premium hikes by capping annual increases to 10 percent. Currently, premiums increase by up to 25 percent every year, depressing property values, creating affordability challenges, and discouraging participation in the program.
Cuts Wasteful Expenses to Pay for Investments. Freezes interest payments and establishes new controls for private insurance company compensation in order to reinvest in proactive mitigation efforts and affordability measures, including low-interest loans for homeowners’ mitigation projects and affordability vouchers.
Strong Investments in Mitigation. Provides robust funding levels for large-scale, communitywide mitigation efforts, and mitigation assistance programs, which have a 4:1 return on investment and are the most effective way to reduce flood risk.
Expanded Increased Cost of Compliance (ICC) Coverage. Increases the maximum limit for ICC coverage to better reflect the costs of mitigation projects and expands eligibility in order to encourage more proactive mitigation before natural disasters strike.
LiDAR Mapping. Authorizes funding for Light Detection and Ranging (LiDAR) technology for more accurate mapping of flood risk across the country, reducing confusion and generating better data.
Oversight of Write Your Own (WYO) Companies. Caps compensation for WYO companies to 22.4 percent of written premiums, creates new oversight measures for insurance companies and vendors, and provides FEMA with greater authority to terminate contractors that have a track record of abuse.
Claims and Appeals Process Reforms Based on Lessons from Sandy. Fundamentally reforms the claims process based on lessons learned after Superstorm Sandy and other disasters, leveling the playing field for policyholders during appeals and litigation by holding FEMA to strict deadlines for payments to homeowners, banning aggressive legal tactics that prevent homeowners from filing legitimate claims and ending FEMA’s reliance on outside legal counsel from expensive for-profit entities.
Better Training. Provides for increased training and certification of agents and adjusters to reduce mistakes and improve the customer experience.
Sen. Menendez, who chaired the Sandy Task Force with Sens. Booker, and Charles E. Schumer and Kirsten Gillibrand (both D-N.Y.), first exposed the problem of widespread lowballing of flood insurance claims during Congressional hearings he chaired 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 deserved, but were initially denied.
Sen. 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 (SBA). His Homeowner’s Flood Insurance Affordability Act was signed into law in 2014 to address skyrocketing rates many Sandy survivors were encountering. In 2013, he shepherded the original $60 billion federal Sandy aid package through Congress.