Sen. Menendez urges Congress to pass a long-term NFIP reauthorization with an affordability program to combat rising costs of premiums, make policies more accessible
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Tuesday questioned Patty Hernandez, Executive Director for Headwaters Economics, Carolyn Kousky, Associate Vice President for Economics and Policy at the Environmental Defense Fund, and Roy Wright, President of the Insurance Institute for Business and Home Safety and former NFIP Director, during a hearing entitled “Reauthorization of the National Flood Insurance Program: Improving Community Resilience,” about the need to reform the NFIP and how FEMA’s legislative proposals would only hurt working families.
“Despite flooding being the most frequent and costly natural disaster, just four percent of Americans have a flood insurance policy…and it appears the NFIP’s new rating methodology, Risk Rating 2.0, has only made flood insurance more out of reach for working and middle-class families,” Menendez said. “In Paterson, New Jersey, where the median household income is $50,000 a year, 180 homeowners will see their premiums increase from an average of $1,500 a year to an average of $4,000 a year.”
In an analysis by the Insurance Information Institute, only four percent of Americans have flood insurance, despite the fact that 90 percent of catastrophes in the United States involve flooding.
Sen. Menendez pointed out how FEMA’s proposal of so-called “continuous coverage” would open up the program to further cherry picking by private insurance companies, depleting the program of lower risk policies and jeopardizing the integrity and financial soundness of the program.
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 10 years ago. The NFIP-RE Act, which Sen. Menendez plans to reintroduce soon, would extend the program for five years, while implementing a series of sweeping reforms to address the waste, abuse and mismanagement plaguing the system.
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.
