Senator Robert Menendez | Senator Robert Menendez Official U.S. Senate headshot
Senator Robert Menendez | Senator Robert Menendez Official U.S. Senate headshot
WASHINGTON, D.C. – U.S. Senators Bob Menendez (D-N.J.) and Bill Cassidy (R-La.), alongside U.S. Representatives Frank Pallone (D-N.J.-06) and Clay Higgins (R-La.-03), today introduced the bipartisan and bicameral National Flood Insurance Program Reauthorization (NFIP-RE) Act of 2023. This legislation would reauthorize the program for five years – providing greater stability for homeowners, small business owners, and the real estate market as the nation continues to struggle with inflationary pressures. It will also implement a series of sweeping reforms to reduce costs, make generational investments in communities to reduce flood risk, and establish a fairer claims process for policyholders.
“Congress can no longer afford to punt long-term reauthorization and reform of the NFIP. It’s time to put policyholders first and address the longstanding systemic issues with the program that came under the national spotlight in the aftermath of Hurricane Sandy,” said Sen. Menendez. “With disastrous flooding events becoming all the more common, we must work to create a more sustainable, resilient, and affordable flood insurance program that invests in prevention and mitigation efforts, and all while ensure hard-working Americans can have peace of mind in the event of a disaster.”
“Reforming the NFIP means making it affordable again,” said Dr. Cassidy. “We need to ensure families are not priced out of the program.”
“New Jerseyans still know all too well how important a flood insurance program is. After Superstorm Sandy and Hurricane Ida devastated New Jersey communities, insurance companies have outright refused to make good on their promises to policyholders and used the fine print to deny families who lost everything,” said Rep. Pallone. “For years, I’ve been warning that Risk Rating 2.0 could be used to unfairly target coastal communities while making flood insurance unaffordable for working families, and that’s exactly what I’m hearing from my constituents. FEMA’s Risk Rating 2.0 is lowering costs for some, but it’s causing thousands of households to drop coverage all together due to rate shocks. The National Flood Insurance Program must be affordable and fair – otherwise it just doesn’t work. This bill will strengthen the program so that homeowners in my district are protected from the devastating effects of flooding.”
“Flood insurance for home and business owners in South Louisiana and across the country is a necessity that has become increasingly unaffordable for hardworking Americans,” said Rep. Higgins. “Millions of homeowners rely on NFIP as the only real option for flood insurance. Reauthorization of NFIP is a necessity, and forcing Congress to address the serious problems of Risk Rating 2.0 is a priority. My office remains focused on passing a long-term reauthorization that protects affordability, improves flood plain mapping, and prioritizes pre-disaster mitigation.”
The NFIP-RE Act of 2023 tackles systemic problems with flood insurance, puts the program back on solid fiscal ground, and reframes the nation’s entire disaster paradigm to one that focuses more on prevention and mitigation to prevent the high cost of rebuilding after flood disasters. Over the last year, the NFIP has lost 100,000 policyholders, and according to the Associated Press, the program is estimated to lose hundreds of thousands more policyholders over the coming years due to FEMA's new rating methodology Risk Rating 2.0, at a time when flood risk is only expected to grow. Sens. Menendez and Cassidy, along with several of their colleagues, consistently warned about the negative effects Risk Rating 2.0 would have on the stability of NFIP and how it would hurt policyholders.
The NFIP-RE Act of 2023 would:
- Protect policyholders from exorbitant premium hikes by capping annual increases at nine percent.
- Provide a comprehensive means-tested voucher for millions of low- and middle-income homeowners and renters if their flood insurance premium becomes prohibitively expensive.
- Increase the maximum limit for Increased Cost of Compliance (ICC) coverage to better reflect the costs of rebuilding and implementing mitigation projects.
- Boosts funding for mitigation grants and modernizes mapping to identify and reduce flood risks.
- Create new oversight measures for insurance companies and vendors, and provides FEMA with greater authority to terminate contractors that have a track record of abuse.
- Reform the claims process based on lessons learned from Superstorm Sandy and other disasters, to level the playing field for policyholders during appeal or litigation, hold FEMA accountable to strict deadlines so that homeowners get quick and fair payments, and ban aggressive legal tactics preventing homeowners from filing legitimate claims.
“By making flood insurance unaffordable, the Biden administration’s Risk Rating 2.0 is making it impossible for Louisianians to protect their biggest assets—their homes,” said Sen. Kennedy. “We must make sure that the NFIP works for the people who depend on it, and this bill would do that.”
"It is critical our nation's flood insurance program is stable and affordable so that our communities and policyholders can protect their homes and businesses and get the help they need when disaster strikes,” said Sen. Booker. “This legislation takes important steps to reduce risk, invest in pre-disaster mitigation efforts, and support those in need. We must protect Americans from the devastating impacts of flooding.”
“The rollout of Risk Rating 2.0 has only served to compound the fundamental problems within the National Flood Insurance Program, which isn’t doing anyone any favors especially those who need flood insurance most. There’s no point in having flood insurance if nobody can afford it,” said Sen. Hyde-Smith. “The comprehensive reforms in this legislation deserve to be enacted so we can begin to fix the dysfunction of the existing NFIP program. Taxpayers and policyholders deserve nothing less.”
“Helping our communities prepare for and recover from the devastation caused by flooding should be one of our highest priorities, especially as so many states continue to be hit with extreme weather,” said Sen. Gillibrand. “The National Flood Insurance Program protects households in New York and across the country from the losses that follow major flooding, but for too many, flood insurance is becoming unaffordable. The NFIP-RE Act of 2023 will ensure that flood insurance programs are affordable, transparent, and accountable for New Yorkers and others across the country.”
"Like the rest of the country, communities across Maryland are feeling the impacts of flooding caused by more frequent and extreme weather events. That’s why we need to reform this program – to ensure families and businesses across the state have access to affordable coverage and our flood maps are up-to-date,” said Sen. Van Hollen.
“The National Flood Insurance Program is a lifeline for many Mississippi communities at risk of flooding, and it is important for the program to be renewed,” said Sen. Wicker. “This legislation will reauthorize the program while incorporating much-needed reforms to help address the skyrocketing costs of premiums and make the program work better for policyholders and the taxpayer.”
“Flood insurance is a necessity in Florida, and getting the National Flood Insurance Program (NFIP) on track to fiscal sustainability is critical to ensuring millions of policyholders maintain coverage. This legislation would provide a five-year reauthorization and create stability for millions of policyholders across the state and nationwide,” said Sen. Rubio.
The National Association of Counties, New Jersey Organizing Project, American Policyholder Association, New Orleans Chamber of Commerce, Baton Rouge Area Chamber, Home Builders Association of Greater Baton Rouge, and Greater New Orleans, Inc. support the NFIP-RE Act of 2023.
“The bipartisan National Flood Insurance Program Reauthorization Act would provide much-needed, long-term certainty and key reforms that would benefit counties and our residents,” said National Association of Counties Executive Director Matthew Chase. “Reauthorizing the program for five years would ensure continuous operation and greater stability for policyholders. Additionally, we appreciate the caps placed on annual premium increases, affordability provisions for low- and middle-income policyholders, and increased investments in flood mitigation. The bill would also increase transparency on FEMA’s new risk rating system, known as Risk Rating 2.0, and freeze interest payments on the NFIP debt, helping to make the program solvent. Counties thank Senators Menendez and Cassidy for their leadership, and we look forward to working with our bipartisan congressional partners to secure passage of this legislation.”
“Homeowners in the New Orleans area have seen their flood insurance rates double and even triple in the past few years, with more rate hikes to come. We need bold action by Congress to stop this, and Senator Cassidy’s legislation is a great start. Together, we can keep New Orleans affordable for our families and businesses,” said Sandra Lindquist, President and CEO of the New Orleans Chamber of Commerce.
“The Great Flood of 2016 and other weather events demonstrate the need for affordable flood insurance in Louisiana’s Capital Region. Senator Cassidy’s legislation recognizes that, and takes steps to boost participation, correct flood maps, incentivize mitigation, and protect homeowners against Risk Rating 2.0. We appreciate his thoughtful leadership on this issue,” Mr. Adam Knapp, President and CEO, Baton Rouge Area Chamber.
“Home builders in the Capital Region won’t be able to build and sell homes if people can’t buy them. So we need flood insurance policies that are transparent, accountable, and most importantly, affordable. We appreciate Senator Bill Cassidy working to reform the National Flood Insurance Programs, so all this is possible,” Ms. Karen Zito, President and CEO of the Home Builders Association of Greater Baton Rouge.
“This legislation will benefit both policyholders, and the program itself, at many levels, including, but not limited to: forbearing NFIP interest payments, reinvesting up to $620 million of annual savings into flood mitigation, and authorizing a means-tested affordability program,” said Mr. Michael Hecht, President and CEO of Greater New Orleans, Inc. “The Coalition for Sustainable Flood Insurance (CSFI) appreciates Senators Cassidy and Menendez’s continued championship of NFIP and commends all Members of Congress who are responding to their constituents’ need for accessible, affordable, and transparent flood insurance.”
Sens. Menendez and Cassidy have long been leaders in the fight to increase flood protections for New Jersey and Louisiana residents, and Americans all across the country. Last week, Sen. Menendez participated in the grand opening of ResilienCity Park in Hoboken, NJ – offering more than five acres of public open space and two million gallons of stormwater detention to mitigate the impacts of devastating rain events and flooding. Earlier this month, the Sen. Menendez and Rep. Pallone highlighted the commencement of the Two Rivers Water Reclamation Authority (TRWRA) sewer/pump station project, for which they secured $20 million in federal grant funding. These measures will bolster the resilience of crucial wastewater and stormwater infrastructure while safeguarding the station and surrounding communities from future storms.
Last month, Sens. Menendez and Booker announced a combined total of $8.8 million from FEMA to mitigate flood risks in the City of Bayonne and in Rutherford, NJ. During a Senate Banking Committee hearing in April, Sen. Menendez emphasized the importance of keeping flood insurance affordable to lower housing costs for working families. In the same month, Sens. Menendez, Cory Booker, Kristen Gillibrand and Senate Majority Leader Chuck Schumer introduced the New York-New Jersey Watershed Protection Act to improve water quality and increased flood protections for residents near these vital water resources.
In March, Sen. Menendez joined with Rep. Pallone to hold a groundbreaking ceremony with the U.S. Army Corps of Engineers for the Union Beach flood control project to reduce flooding and better protect the area from rising seas and future catastrophic weather events. In the same month, Sen. Menendez also joined Sen. Kennedy in introducing the National Flood Insurance Program (NFIP) Consultant Accountability Act of 2023 to protect homeowners affected by natural disasters from working with third parties found guilty of fraud related to property damage assessments. In 2020, Sens. Menendez and Hyde-Smith introduced bipartisan legislation to eliminate the cost-share payments required of states and communities included in federal disaster declarations in 2020.
Sen. Menendez, along with the supporters of this bill, has long been a leading advocate in Congress for overhauling the National Flood Insurance Program (NFIP), since Superstorm Sandy devastated New Jersey more than 10 years ago. 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). President Obama signed Sen. Menendez' Homeowner’s Flood Insurance Affordability Act into law in 2014 to address skyrocketing rates many Sandy survivors were encountering. In 2013, the Senator shepherded the original $50 billion federal Sandy aid package through Congress.
For the full text of the legislation, click HERE. For a one-pager of the legislation, click HERE.
Original source can be found here.
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