Source: United States Senator for New Jersey Bob Menendez
PATERSON, N.J. – On the ninth anniversary of Superstorm Sandy slamming New Jersey, U.S. Senators Bob Menendez and Cory Booker (both D-N.J.) and Congressman Bill Pascrell, Jr. (N.J.-09) unveiled their bipartisan, bicameral legislation to extend the National Flood Insurance Program (NFIP) for five years, while implementing a series of sweeping reforms to address the waste, abuse and mismanagement plaguing the system. Over five million Americans depend upon the NFIP, including 220,000 New Jerseyans. Congressman Frank Pallone, Jr. (N.J.-06) is the prime sponsor of the legislation in the House of Representatives.
Today marks nine years since Superstorm Sandy struck the Garden State, destroying homes, uprooting communities and displacing thousands of residents, and while much of the state has rebuilt, the recovery continues for far too many New Jerseyans.
“It is time Congress stops kicking the can down the road with reauthorizations that do not address the systemic problems plaguing this program. With this legislation, we can make NFIP more sustainable, we can make flood insurance more affordable, and we can hold FEMA and its private contractors more accountable,” said Sen. Menendez. “And instead of waiting for the next disaster to strike, we can invest in mitigation that prevents costly flood damage in the first place.”
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“Nine years ago, Superstorm Sandy made landfall in New Jersey, leading to widespread and historic flooding, devastation to homes and businesses, and the tragic loss of life,” said Sen. Booker. “We know that Sandy wasn’t a one-time event; instead, due to the effects of climate change, historic and damaging storms will become the new normal. This is why this bipartisan, bicameral bill is important – from reauthorizing the flood insurance program and making it more affordable, to investing in flood mitigation, these efforts are vital to giving New Jerseyans peace of mind from future storms. I will also continue to work with colleagues and the Biden administration to address the climate crisis and fund the robust infrastructure investment we need to build stronger, more resilient communities.”
“We know New Jerseyans got screwed with red tape that slowed our recovery after Hurricane Sandy,” said Rep. Pascrell. “I remember Sandy’s devastation like it was yesterday. Our neighbors saw their entire lives swept away in an instant. The new Risk Rating program FEMA is unilaterally imposing will increase premiums for over 170,000 policy holders in New Jersey. Our bipartisan bill will make the program more affordable and fairer. Additionally, our legislation has safeguards to stop premiums from being jacked up, it will help people prepare prior to a storm with accurate maps and flood prevention investments, it will strengthen the claims process so survivors get what they need to rebuild, and it will bring much-needed accountability to the Write Your Own program. We owe so much to our flooding victims and are working hard to see these reforms enacted this Congress. I want to especially thank Senator Menendez for his dedication to making our flood insurance program better.”
“Superstorm Sandy devastated New Jersey nine years ago, and my constituents still know all too well how important a flood insurance program is after major flooding events. After the storm, insurance companies outright refused to make good on their promises to policyholders and instead pointed to the fine print while denying families who had lost everything. The National Flood Insurance Program must be both affordable and fair – otherwise it just doesn’t work. This bill delivers a long-term flood insurance program reauthorization that improves the program based on the realities of major weather events like Sandy,” said Rep. Pallone. “This legislation will go a long way to strengthen our flood insurance program so that homeowners in my district are protected from the devastating effects of future flooding.”
Since Superstorm Sandy, New Jersey has experienced several major storms that caused flooding and damage. Earlier this week, New Jersey was hit with a Nor’easter that caused flooding in parts of the state. In September, Hurricane Ida ravaged parts of New Jersey causing widespread damage and flooding, which lead to the deaths of at least 30 individuals, and caused millions of dollars in property damage. In 2011, just months before Superstorm Sandy, Hurricane Irene caused billions of dollars in damage across the state and impacted 200,000 homes and buildings.
“Climate change is here,” said Sen. Menendez. “I have spent decades calling for action to cut carbon pollution and slow climate change. I have three beautiful granddaughters, and I constantly worry about what kind of world we are leaving them. The fires, the floods, the droughts, the lost crops – it will all get worse in the years ahead. Future generations are depending on us. I don’t know what will motivate Republicans to join us in this fight. But let’s be clear. Even if somehow the entire United States went completely carbon neutral tomorrow, we would still need to invest in mitigation to create a more sustainable flood insurance program.”
The National Flood Insurance Program Reauthorization and Reform Act tackles systemic problems with flood insurance, puts it back on solid fiscal ground, and reframes the nation’s entire disaster paradigm to one that focuses more on prevention and mitigation in order to spare the high cost of rebuilding after flood disasters. Sens. Bill Cassidy and John Kennedy (R-La.) are also sponsors of the bill. The lawmakers plan to formally introduce the bill next week.
Risk Rating 2.0, the Federal Emergency Management Agency’s (FEMA) new rating system, went into effect earlier this month, which is expected to raise premiums on 80% of NFIP policyholders nationwide. Around 900,000 policyholders are expected to drop their insurance because of the hikes. Last month, Sen. Menendez called on FEMA to delay the implementation of Risk Rating 2.0.
Sens. Menendez and Booker announced the introduction of their bill at City Hall in Paterson, which experienced the effects of Superstorm Sandy, Hurricane Irene and Tropical Storm Ida. 76% of NFIP policyholders in the city will see premium spikes due to Risk Rating 2.0. After Tropical Storm Ida caused devastating flooding and damage across the state, Sen. Menendez and Rep. Pascrell met with displaced Paterson residents at a Red Cross Shelter.
The federal lawmakers were joined by Mayor Andre Sayegh, New Jersey Organizing Project (NJOP) Board President Joe Mangino, NJ Realtors® Federal Political Coordinator and Past President Ilene Horowitz and American Policyholder Association Executive Director Doug Quinn.
“The City of Paterson has seen the devastation that storms like Superstorm Sandy and Hurricane Ida can do to our community,” said Mayor Sayegh. “This legislation will help thousands of residents prepare and reduce flood risks to help ease their worries about the after-effects of storms. We thank Senator Menendez, Senator Booker, and Congressman Pascrell for continuing to fight for communities like Paterson who rely on these much-needed resources.”
“I hate referring to myself as a Superstorm Sandy victim. I’m not here as a victim of Sandy. I faced Sandy head on and I won. I’m here as a victim of a broken disaster recovery system. That’s why it’s so important that we are standing here today with legislation to overhaul the National Flood Insurance Program based on the experiences of people like me, and Senators and Representatives who have stood in the trenches and fought to get families home. There’s no point in having flood insurance if families can’t afford it. And we have to shift toward mitigation because of the increasing severity of storms and impacts we’re seeing from climate change. The NFIP Re Act are the reforms we need for an affordable, fair, family focused and forward thinking National Flood Insurance program,” said Mangino.
“NJ Realtors® thanks Senator Menendez, Senator Booker and Congressman Pascrell for their important work on reforming the National Flood Insurance Program,” said Horowitz. We applaud their efforts to mitigate the impact that risk rating 2.0 could have on current homeowners and potential first time home buyers.”
Doug Quinn, a Marine veteran who moved back into his newly-rebuilt, elevated home in Toms River’s Silverton section in 2019, joined the lawmakers today. Nine years ago, record storm surge up Barnegat Bay and the nearby Kettle Creek sent three-foot waves crashing into the family’s ranch-style house, he lived in with his teenaged daughter, inundating it with four-foot-deep floodwater.
The Quinns had already been displaced for 21 months when Sen. Menendez first visited their home in July 2014 to highlight systemic problems that delayed recovery for thousands of Sandy survivors. Despite a $254,000 damage assessment and $250,000 in flood insurance coverage, the Quinns initially received only $92,000, of which their mortgage company held half, leaving them with little money to remediate and rebuild. Doug Quinn was later mired for years in the state’s Reconstruction, Rehabilitation, Elevation, and Mitigation (RREM) Program created under the Christie Administration, and eventually paid $42,000 in legal fees to get what he was entitled to rebuild.
“The American Policyholder Association supports the efforts of Senators Menendez & Booker to craft legislative solutions to fix a National Flood Insurance Program that has too often failed consumers & flood victims,” said Quinn. “We are calling for a transparent, affordable program that serves the best interests of the American families. Consumers have a right to expect honesty and integrity in return for their hard earned premium dollars.”
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The National Flood Insurance Program Reauthorization and Reform Act provides:
· Long-Term Certainty. Reauthorizes the NFIP for five years, providing certainty for communities.
· No Steep Rate Hikes under Risk Rating 2.0. Protects policyholders from exorbitant premium hikes by capping annual increases at 9%. Currently, premiums can nearly double every 4 years and FEMA’s new methodology called Risk Rating 2.0 will fundamentally alter premiums on every policy in the country. This new methodology plans to cause a rate shock and lead to unaffordability premiums, forcing homeowners to drop coverage or lose their homes. CBO and FEMA believe that Risk Rating 2.0 will cause nearly 900,000 policyholders to drop NFIP coverage due to the rapid premium increases. We saw all too clearly the negative consequences of hiking premiums after the Biggert-Waters Act of 2012 caused costs to skyrocket, hurting policyholders and disrupting the real estate market. This will put guardrails on FEMA’s new rating methodology, known as Risk Rating 2.0, and safeguard policyholders from sudden rate shocks while responsibly disclosing full flood risk.
· Affordability for Low- and Middle-Income Policyholders. Provides a comprehensive means-tested voucher for millions of low- and middle-income homeowners and renters if their flood insurance premium become overly burdensome, significantly increasing the affordability of the NFIP program.
· Path to NFIP Solvency. Freezes interest payments on the NFIP debt and reinvests savings towards cost saving mitigation efforts to restore the program to solvency and reduce future borrowing
· Limits on Private Insurance Company Profits. Caps Write Your Own (WYO) compensation at the rate FEMA pays to service its own policies and redirects the savings to pay for the means-tested affordability program.
· Increased Cost of Compliance (ICC) Coverage. Increases the maximum limit for ICC coverage to better reflect the costs of rebuilding and implementing mitigation projects. In addition, ICC coverage eligibility is expanded in order to encourage more proactive mitigation before natural disasters strike.
· Strong Investments in Mitigation. Provides robust funding levels for cost-effective investments in mitigation, which have a large return on investment and are the most effective way to reduce flood risk.
· More Accurate Mapping. Increases funding for FEMA’s flood mapping program to implement Light Detection and Ranging (LiDAR) technology for more accurate flood risk across the country, generating data that will lead to better building and land use.
· Oversight of Write Your Own (WYO) Companies. 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 in Superstorm Sandy and other disasters, to level the playing field for policyholders during appeal or litigation, bans aggressive legal tactics preventing homeowners from filing legitimate claims, holds FEMA to strict deadlines so that homeowners get quick and fair payments, and ends FEMA’s reliance on outside legal counsel from expensive for-profit entities.
Sen. Menendez has been the leading advocate in Congress for an overhaul of the National Flood Insurance Program (NFIP), since Superstorm Sandy devastated New Jersey nearly nine years ago.
In June, Sens. Menendez and Kennedy introduced the National Flood Insurance Program Consultant Accountability Act, which would enhance the Federal Emergency Management Agency’s (FEMA) ability to protect homeowners from parties found guilty of fraud that involved in NFIP property damage assessment.
In 2019, the he introduced the National Flood Insurance Program Reauthorization and Reform (NFIP Re) Act of 2019 to reform the NFIP and ensure affordability.
Sen. Menendez first exposed the problem of widespread lowballing of flood insurance claims during Congressional hearings he chaired in 2014, and then successfully pushed FEMA to reopen every Sandy flood insurance claim for review, which compensated Sandy victims with more than $260 million in additional payments they were initially denied.
Sen. Menendez authored the Superstorm Sandy Relief and Disaster Loan Program Improvement Act, 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.