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 introduced comprehensive, bipartisan legislation to extend the NFIP for six years while instituting a series of sweeping reforms to address the waste, abuse and mismanagement plaguing the system that led to delayed recovery for Sandy survivors. The bill is cosponsored by Sen. Cory Booker (D-N.J.).

“Americans deserve a National Flood Insurance Program that is sustainable for taxpayers, affordable for homeowners, and accountable to everyone,” said Sen. Menendez. “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.”

“Hurricane Sandy underscored how vital the National Flood Insurance Program is to helping people rebuild their lives,” said Sen. Booker. “Unfortunately, this devastating storm also revealed the need to reform the NFIP and make sure FEMA better serves New Jerseyans by eliminating agency waste and mismanagement. 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.”

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.

The bill is also cosponsored by Sens. John Kennedy (R-La.), Chris Van Hollen (D-Md.), Marco Rubio (R-Fla.), Elizabeth Warren (D-Mass.) and Thad Cochran (R-Miss.), all members of the Senate Banking and Appropriations Committees that are ultimately charged with writing the NFIP reauthorization legislation, and Bill Nelson (D-Fla.).

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 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.

Sens. Menendez, Kennedy, Van Hollen, Rubio, Warren and Cochran laid out their shared, bipartisan framework for reform in an op-ed they penned for the Wall Street Journal.

“More than five million Americans depend on this vital program to protect their homes and businesses. This is an essential program, not just for Louisiana, but for the entire U.S,” said Sen. Kennedy, who sits on both the Senate Banking and Appropriations Committees. “We have to ensure that families and businesses in flood-prone areas are protected. This bill will reauthorize the National Flood Insurance Program while making common sense reforms to maintain its solvency.”

“From Ellicott City to the Eastern Shore, flooding impacts communities across Maryland,” said Sen. Van Hollen, a member of the Senate Banking Committee. “We need to reform the National Flood Insurance Program to ensure that families and businesses have the affordable coverage they need, our flood maps are based on the most update-to-date science, and the NFIP program has long-term stability for communities across the country.”

“The National Flood Insurance Program is vitally important to my home state of Florida, which is a major contributor to the system,” said Sen. Rubio, a member of the Senate Appropriations Committee. “This bill helps ensure long-term stability, while providing much needed reforms to protect the program’s policyholders. It is past time for the federal government to take a more proactive approach in addressing the underlying risk affecting flood prone communities. I am proud to have worked with this bipartisan group to make our National Flood Insurance Program more viable, sustainable and accountable.”

“It's time to come together to pass a long-term, bipartisan NFIP reauthorization that makes much-needed reforms to the flood insurance program,” said Sen. Warren, a member of the Senate Banking Committee. “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."

“Policyholders in Mississippi and around the country know the National Flood Insurance Program needs to be reformed. This legislation is a solid starting point to make the program more affordable and accountable. We want to return emphasis on flood control infrastructure, and fully recognize the physical and financial protections gained from these cost-shared investments,” said Sen. Cochran, chairman of the Senate Appropriations Committee. “I look forward to working to pass bipartisan reforms that offer better flood protection and more effective coverage for homeowners, businesses, and communities.”

SAFE NFIP has the support of several leading experts and flood victims advocates:

Mayor Dawn Zimmer, Hoboken:

“I applaud Senator Menendez for leading a bipartisan group of senators to improve the National Flood Insurance Program by placing a strong emphasis on resiliency, increasing mitigation funding, reforming the claims process, and addressing the program’s inherent unfairness to urban areas. Most importantly for cities like Hoboken, the bill would acknowledge the unique challenges faced in urban areas by providing premium reductions for partial mitigation measures, like raising utilities and mechanical equipment where it is not practical to raise an entire building, and by treating existing garden level homes as residential units.”

George Kasimos, President and Founder of StopFEMANow:

“This is what bold legislation looks like. Senator 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.”

Kevin Walsh, Executive Director of the Fair Share Housing Center:

“This legislation would protect homeowners from the kind of abuses New Jerseyans saw after Superstorm Sandy. The bill would help speed payments to homeowners trying to rebuild after a natural disaster, while also ensuring that they are fairly compensated and giving them avenues to appeal insurance company decisions. This proposal would also keep the Jersey Shore affordable to working families by limiting increases in homeowner insurance premiums.”

Susan Marticek, Executive Director, Ocean County Long-Term Recovery Group:

“Very excited to see Sen Menendez’s legislation because it 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 both 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. The post-disaster reforms show the admirable degree to which Senator 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.”

Amy Bach, Esq., Executive Director of United Policyholders:

“Senator Menendez has been in the flood recovery and insurance trenches with home and business owners for many years. His proposed legislation distills lessons learned into reforms that will restore confidence and integrity to this essential program.”

Jay M. Feinman, Distinguished Professor of Law, Rutgers Law School:

“Flood insurance works only when policyholders' claims are paid fully and promptly in case of loss. 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 is promises.”

Amanda Devecka-Rinear: Director, New Jersey Organizing Project:

“After Superstorm Sandy, thousands of families struggled and learned hard lessons about our recovery programs, including the National Flood Insurance Program. Senator Menendez’s legislation applies what we learned in order to make sure no families suffer like ours in the future. It's 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.”

Melissa H. Luckman, Esq., Director of the Disaster Relief Clinic at Touro Law Center:

“The NFIP reauthorization bill introduced by Senator Menendez speaks directly to the shortfalls of the NFIP post Sandy. This bill will ensure that the fraud, deceit, and mismanagement of the NFIP faced after Sandy never happen again. Senator Menendez has been relentlessly advocating on behalf of all Sandy survivors since immediately post-Sandy through the Sandy Task Force, which forced FEMA to re-open all 144,000 NFIP insurance claims and to date has paid out over $208 million. This bill is the culmination of four-and-a-half years of spending countless hours listening to boots-on-the-ground constituent circumstances, and providing real and thorough reforms to ensure that policyholders have a voice and are protected in future flooding events. I completely support all of the protections afforded to homeowners in this bill.”

Jessica Limbacher, Esq., Staff Attorney, Volunteer Lawyers for Justice:

“Based on what we at Volunteer Lawyers for Justice have seen firsthand over the past four-and –a-half years since Superstorm Sandy, dealing with the National Flood Insurance Program has been almost as stressful as the storm itself for so many homeowners. Thousands of storm survivors who relied on the fact that they were fully insured were in fact underpaid by their carriers, either due to widespread fraud or complicated exclusions in their policy that were never made clear to them. The reforms in Senator Menendez’s bill are critical to ensure that future disaster victims are awarded a fair process for filing and appealing claims, that insurance carriers are not incentivized to underpay homeowners, and that the entire program is affordable and sustainable.”

Lisa Sharrard, former So. Carolina NFIP Coordinator, owner of Choice Flood Insurance:

“Senator Menendez’s proposed legislation contains very important consumer protection upgrades. Agents have direct contact with policyholders and by improving training, and having a logical structure to provide feedback to FEMA, the Administrator and companies will greatly improve the policyholder 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.