Menendez: Fix deluge of problems caused by federal flood insurance
With the National Flood Insurance Program set to expire in the next few months, a group federal lawmakers led by New Jersey’s senior U.S. senator is proposing a bipartisan fix that would hold the line on premium increases and assist with resiliency efforts.
According to U.S. Sen. Bob Menendez, the current National Flood Insurance Program is unresponsive to the needs of people whose homes have been flooded, which is why he’s sponsoring the Sustainable, Affordable, Fair and Efficient National Flood Insurance Program Reauthorization Act.
During a news conference in Washington, Menendez said many of the features of the SAFE Act are based on lessons learned from Superstorm Sandy, which damaged 650,000 homes in New Jersey and left more than 8 million people without power while claiming dozens of lives.
Menendez said after that natural disaster slammed the state, many New Jerseyans faced a man-made disaster: “a flood insurance program that was stacked against them at every turn.”
He pointed out something must be done because today “premiums continue to rise, homeowners continue to abandon policies and the NFIP continues to sink deeper into the red.”
He said the SAFE NFIP Act “levels the playing field for homeowners during the claims process, it tackles waste and abuse throughout the program, it puts those cost savings towards making premiums more affordable and our communities more resilient.”
“Our bill puts the brakes on runaway premium hikes, lowering the cap on annual increases from 25 to 10 percent.”
At the same time, Menendez said the act creates “new incentives to help homeowners finance flood-proofing, elevation and other mitigation projects, and these investment in resiliency will be worth every penny and then some.”
“According to the GAO, every dollar spent on mitigation generates $4 in savings and homeowners reap the benefits in the form of lower premiums.”
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He said the legislation also would end FEMA’s reliance on outdated, inaccurate flood maps and invests in state-of-the-art flood mapping technologies.
“Investments in affordability, flood mapping and resilience will be paid for first by freezing interest payments on the NFIP’s own debt, beyond the insanity of having the federal government charge itself interest, we’re robbing Peter to pay Paul.”
The SAFE Act would also establish 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.
Menendez said, “We also generate savings by raiding the system of wasteful practices and perverse incentives that hurt homeowners and drive up costs for taxpayers.”
He explained that after Sandy, FEMA wasted tens of millions of dollars fighting homeowners in court, giving rise to an entire cottage industry of attorneys who get rich by dragging out litigation over flood claims. But this practice would no longer be tolerated.
“In an era of rising sea levels, the time for bold investments and coastal resilience and community flood prevention is now,” he said.
“We can’t control every flash flood or tropical storm that comes our way but we can control how we as a country prepare for such disasters. This legislation puts the lessons we learned after Superstorm Sandy and others into action, putting people ahead of insurance industry profits, making long overdue investments in mitigation and coastal resilience.”
The SAFE Act is one of several bills being considered in Congress to extend the National Flood Insurance Program.
You can contact reporter David Matthau at David.Matthau@townsquaremedia.com