LITTLE FERRY, N.J. – U.S. Senator Bob Menendez (D-N.J.), chair of the Sandy Task Force and a senior member of the Senate Committee on Banking, Housing and Urban Affairs, today laid out a series of robust reforms to the much-maligned National Flood Insurance Program (NFIP) administered by the Federal Emergency Management Agency (FEMA) that experienced widespread failures and fraud, cheating storm victims and hampering recovery in the aftermath of Superstorm Sandy. Sen. Menendez aims to make the NFIP: simple, affordable, fair, efficient and accountable to consumers and taxpayers.
“Americans deserve a program that is sustainable for taxpayers, affordable for homeowners, and accountable to everyone,” Sen. Menendez said. “If we want a more sustainable system, the answer isn’t to slam homeowners with even higher rates. The answer is to go after the waste and abuse that’s rampant throughout FEMA. The National Flood Insurance Program is full of perverse incentives that drive up costs for taxpayers and that hurt homeowners. The principles I’ve outlined would require insurance companies to start spending more of the premium dollars they receive on the customers they are paid to serve.”
The senator also decried the Trump Administration for floating a plan to fund construction of the president’s Mexican border through a surcharge on flood insurance policies, and cuts to the Coast Guard, airport security and disaster recovery assistance for local communities.
“The idea that Mexico was ever going to pay for a giant wall along our southern border was laughable, but the notion that New Jersey homeowners should pay for it is unconscionable,” said Sen. Menendez. “Tacking another surcharge onto flood insurance premiums would likely put policies out of reach many homeowners across New Jersey and throughout our country.”
Congress is beginning to debate reauthorization of the NFIP, which is set to expire on Sept. 30, 2017. The first hearing before the Senate Banking Committee is scheduled for tomorrow.
Sen. Menendez’s prescription for NFIP reform will address the following:
Sen. Menendez outlined his principles for NFIP reform at a news conference in Little Ferry, one of several communities severely impacted by Superstorm Sandy in 2012. He was joined by Congressman Bill Pascrell, Jr. (N.J.-09); Mayor Mauro Raguseo; George Kasimos of Stop FEMA Now; Susan Marticek of the Ocean County Long-term Recovery Group; Amanda Devecka-Rinear of the New Jersey Organizing Project; and New Jersey homeowners and storm victims.
“Reauthorizing the National Flood Insurance Program is an opportunity to fix major problems we saw in wake of Superstorm Sandy,” said Rep. Pascrell. “We also need to ensure every dollar paid by struggling homeowners is used to drive down costs and improve mitigation efforts. New Jerseyans paid into this program with the expectation that the government will provide reliable flood insurance coverage, not use it as a slush fund for unrelated government projects like President Trump's Mexican border wall.”
Sen. Menendez, who chaired the Sandy Task Force with Sens. Cory Booker (D-N.J.), 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.
April 22, 2021