WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), chair of the Sandy Task Force and the leading voice in Congress for sweeping reform to the National Flood Insurance Program (NFIP), today issued the following statement in reaction to the Federal Emergency Management Agency’s (FEMA) release of Risk Rating 2.0 data showing premiums will increase for nearly eight-in-ten policyholders in New Jersey:
“FEMA has dubbed Risk Rating 2.0 ‘Equity in Action,’ but there is nothing equitable about jacking up flood insurance premiums on 80 percent of New Jersey policyholders with hundreds facing immediate annual increases over $1,000 and no end in sight on yearly rate hikes. Throughout this process, FEMA has operated in the dark, avoided critical questions on its methods and procedures for Risk Rating 2.0, and offered little to no transparency.
“I’m all for making sure we use the best available science and technology to assess flood risk, but making flood insurance policies unaffordable for homeowners is not the answer. If we don’t pass sweeping NFIP reforms, Risk Rating 2.0 will cause an enormous rate shock that will reverberate in homes and communities across the country. It will force residents who can’t afford the premiums out of their homes, drive down property values, devastate entire neighborhoods, and further destabilize the National Flood Insurance Program as many opt out of coverage altogether.
“The NFIP works best when more people buy flood insurance, those policies are affordable, and the risk is spread out. If there is a silver lining to Risk Rating 2.0, I believe it will finally galvanize Republicans and Democrats in Congress to pass sweeping reforms I’ve been calling for that lowers the cap on annual premium hikes, revamps the NFIP claims process, puts the program back on solid fiscal ground, and reframes the nation’s entire disaster paradigm to one that focuses more on investing in prevention and mitigation to spare the high cost of rebuilding after the flood. With the NFIP due to expire in September, now is the time to fix this broken system, instead of passing the buck and the pain onto policyholders.”