Menendez Calls on Senate Banking Committee to Pass Comprehensive Flood Insurance Reform Bill

Senator calls Committee leaders’ bill ‘missed opportunity’ to fix NFIP, make flood insurance sustainable, more affordable

Menendez’s bipartisan, comprehensive reform bill widely praised as ‘sensible’ answer to NFIP’s ills; Will push necessary reforms through amendment process

NJ’s largest housing advocacy group: ‘Senator Menendez’s SAFE NFIP Act is the only comprehensive flood bill New Jersey needs’

Association of State Floodplains Managers: ‘We are happy to see [Senator Menendez’s legislation] goes beyond claims issues and has sensible reforms related to broader flood risk reduction goals’

WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the Banking Committee that oversees the National Flood Insurance Program (NFIP), today pushed his colleagues to support a bill that doesn’t just simply continue the status quo for the NFIP, but imposes key reforms to make it more sustainable, more accountable to taxpayers, and more affordable for policyholders.  Sen. Menendez introduced a bipartisan reform bill last month that has the endorsement of many leading experts and advocates. 

Despite growing support for Menendez’s Sustainable, Affordable, Fair, and Efficient (SAFE) National Flood Insurance Program Reauthorization Act of 2017, Banking Chairman Mike Crapo (R-Idaho) and Ranking Member Sherrod Brown (D-Ohio) yesterday unveiled their own legislation to reauthorize the NFIP with inadequate funding for resiliency, no assistance to make premiums more affordable, and very few of the reform measures desperately needed.

“While I appreciate Chairman Crapo’s and Ranking Member Brown’s efforts and their inclusion of pieces of my SAFE NFIP Act – such as improvements to the increased cost of compliance program and urban mitigation – into their proposal, unfortunately their bill falls far short in many areas, and is a wasted opportunity to achieve real, meaningful reforms,” said Sen. Menendez.

“It does nothing to address the affordability crisis facing families as premiums continue to rise at triple the rate of inflation.  It does nothing to fix the structural flaws that plagued the claims process and led to tens of thousands of families being lowballed.  And it doesn’t invest nearly enough in mitigation efforts or to better understand risk through more accurate, scientific mapping.  While devoid of these badly needed flood insurance reforms, the bill curiously includes a provision to help a select handful of states deal with issues that are unrelated to flooding.

“Millions of American families, including 230,000 New Jerseyans, rely on the National Flood Insurance Program for the peace of mind in knowing they will not face financial ruin due to a natural disaster.  While this program is incredibly important to New Jersey homeowners and businesses, we saw critical shortcomings in the aftermath of Sandy in the form of unaffordable premiums, inadequate resources for resiliency, and a broken claims process that lowballed and ran disaster survivors through the ringer. 

“The stakes are simply too high to get this wrong or just kick the can down the road.  As a senior member of the Banking Committee, I have worked tirelessly with my colleagues, including Republicans like Senator Kennedy, to create a bipartisan, comprehensive approach to fixing the NFIP.  I will continue to work to improve the Crapo-Brown bill to ensure New Jerseyans have access to affordable and quality flood insurance.”

Sen. Menendez, chair of the Sandy Task Force, last month introduced the Sustainable, Affordable, Fair, and Efficient (SAFE) National Flood Insurance Program Reauthorization Act of 2017, which extends the NFIP for six years while instituting a series of sweeping reforms to address the waste, abuse and mismanagement plaguing the system that led to delayed recovery for Superstorm Sandy survivors.

The bipartisan, comprehensive bill is cosponsored by fellow Banking members Sen. John Kennedy (R-La.) and Elizabeth Warren (D-Mass.), Appropriations Committee Chairman Thad Cochran (R-Miss.) and Sens. Chris Van Hollen (D-Md.), Marco Rubio (R-Fla.), Cory Booker (D-N.J.), Bill Nelson (D-Fla.), Bill Cassidy (R-La.) and Jack Reed (D-R.I.). 

Many leading experts and flood insurance reform advocates have already endorsed this “critical” bill because it is a “bold proposal” that “takes into account all the hard lessons learned from Sandy” and rallied behind the bipartisan SAFE NFIP reform:

Association of State Floodplain Managers (ASFM):

“Certainly as the past chair of the Sandy Task Force, Senator Menendez has first-hand knowledge of claims and other issues related to the NFIP and rebuilding after such a large and tragic event. We are happy to see that the SAFE NFIP Act goes beyond claims issues and has sensible reforms related to the broader flood risk reduction goals of the NFIP. In fact ASFPM has long argued that the NFIP is the nation’s primary tool for comprehensive flood loss reduction using the incentive of flood insurance availability, publically available flood risk mapping, and flood mitigation funding to compel communities to adopt and administer flood risk reduction regulations. The NFIP is unique as a federal program and ASFPM has cautioned that any reform approach that is too narrowly focused on one element of the program like flood insurance, needs to carefully consider the impacts on the other three components.

“ASFPM is particularly supportive of the following provisions:

•        Increasing the authorization for the National Flood Mapping Program to provide critically needed resources to complete the job of flood mapping for the nation

•        Easing the burden on NFIP policyholders by increasing flood insurance coverage limits and creating an innovative credit on premiums for completing an Elevation Certificate

•        Developing an innovative approach to addressing flood insurance affordability issues

•        Increasing mitigation opportunities through Increased Cost of Compliance, using the interest payments on the debt for flood hazard mitigation, and providing additional funding for the Flood Mitigation Assistance program

•        Redirecting the HFIAA surcharges to help assist with flood insurance affordability and flood hazard mitigation

•        Improving disclosure of flood risk

“The Association of State Floodplain Managers and its 36 State Chapters represent more than 17,000 state and local officials and other professionals who are engaged in all aspects of floodplain management and hazard mitigation including mapping, engineering, planning, permitting, hydrology, forecasting and management of floodplain areas. All ASFPM members are concerned with reducing loss of life and property due to flooding.”

George Kasimos, Founder, STOPFEMANOW in a Facebook post:

“If anyone ever says that all we do is criticize, they could not be more wrong. When we support something fundamental to us, we go ALL IN. When we have a champion, we back them just as fiercely as we might grill those trying to, literally, throw us down the river. And today our longest champion once again showed why he is literally the lion of the homeowners and the flood victims: Senator Menendez introduced the most comprehensive, BI-PARTISAN homeowner-protective, NFIP reforms we could have asked for.

“Several prominent and senior Republicans and Democrats are already sponsoring the bill. Unfortunately there are other Republicans and Democrats who aren’t listening to us…yet.

“Sen. Menendez listened to our calls, he came to our meetings, his staff did their homework and he understood our issues… And now he’s got the most powerful Republicans and Democrats on the Committee joining.

“Now we need to make sure that everyone across the country stands with us. There are several other proposed flood insurance bills in congress, some are wishy washy and don’t address all our needs others were literally written by the insurance companies and will offer us less protection and accelerate flood premium increases.”

Staci Berger, President and CEO of the Housing & Community Development Network of New Jersey:

“Senator Menendez’s SAFE NFIP Act is the only comprehensive flood bill New Jersey needs, and we need it right now.  Unlike other proposals, only the SAFE NFIP Act ensures affordability, resiliency, and integrity. Middle and working class families can barely afford their homes; we need strong measures like the SAFE NFIP Act, not watered down efforts that don’t do as much to protect families and property. We are proud to support this bi-partisan proposal, which addresses skyrocketing premiums with a 10% cap and supercharges investments in resiliency and mitigation.  These investments will not only will make New Jersey communities safer from the next storm but will also translate to lower insurance premiums on individual homes. The bill, importantly, implements the hard lessons learned following Sandy to ensure that future storm victims can actually count on their flood insurance delivering when they need it most. New Jersey needs this bill without delay.  We cannot accept superficial alternatives trying to pass for comprehensive reform that do not recognize NJ’s crisis of affordability and vulnerability to the next storm.”

Tammie DeVooght, Executive Director, International Association of Structural Movers:

“We are pleased to see the bill introduced with bi-partisan support with a recognition of the importance of mitigation and substantial resources committed to the reduction of flood risk to millions of older pre-flood map buildings in America.

“The process in place now to remove policy subsidies on these older buildings has not been matched previously with an increase in funding for grants or loans, which has left home owners and commercial building owners adrift. Our industry estimates there may be as many as 3 million of these older high flood risk buildings in the U.S. river and coastal flood zones. We estimate the cost to mitigate these buildings at around $750 Billion. We don’t just need more grant money for the repetitive loss designated buildings but we need low cost capital so that building owners can have access to the money they need to get these projects done. A flood hazard mitigated building not only has a much lower risk of flooding but also has a much more affordable flood policy rate. Flood mitigated buildings hold or improve their resale values and the important property taxes that fund our schools and government operations. Flood mitigation projects like elevation employ all of the construction trades.

“The International Association of Structural Movers, www.IASM.org is the International trade organization of the specialized professional and experienced contractors that must be employed when a building is elevated or relocated. Our members are at the heart of the flood mitigation efforts here in the US and our companies employ thousands of people and have been at the forefront of disaster recovery and pre-disaster mitigation projects for decades.”

Professor Jay Feinman, Co-Director, Rutgers Center for Risk and Responsibility:

“In these politically fractious times, the bill is sponsored by an unusual coalition including New Jersey’s Senators Menendez and Booker, liberal icon Elizabeth Warren, and conservative stalwart Marco Rubio, among others. The SAFE NFIP bill makes much-needed reforms to the flood insurance claims process, and effectively balances the needs of policyholders and taxpayers. First, the bill allows flood insurance premiums to rise but by no more than 10% per year. Flood insurance premiums will move closer to actuarially sound rates but will avoid large, sudden increases that would have drastic effects. Second, the bill strengthens the flood mitigation process in numerous ways. More funds would be available to more communities and more homeowners—middle-class homeowners in particular—to prevent and to mitigate the effects of flooding. Those funds are an investment that reduce the cost of flood damage and therefore insurance payments in the long-run.”

Jessica Limbacher, Esq., Staff Attorney, Volunteer Lawyers for Justice:

“The reforms in Senator Menendez’s bill are critical to ensure that future disaster victims are awarded a fair process, that insurance carriers are not incentivized to underpay homeowners, and that the entire program is affordable and sustainable.”

Mayor John Ducey, Brick, N.J.:

“As Mayor of a coastal community, I am keenly aware of the financial impact flood insurance has on families.  I am also aware of the growing concerns about raising sea levels and the need to protect investments along our coasts and waterways.  I commend Senator Menendez and the co-sponsors for crafting a bill that builds on the lessons learned from Super Storm Sandy and gives families and communities the resources they need to protect themselves and their homes.”

Mayor Dawn Zimmer, Hoboken, N.J.:

“I applaud Senator Menendez for leading a bipartisan group of senators to improve the National Flood Insurance Program by placing a strong emphasis on resiliency, increasing mitigation funding, reforming the claims process, and addressing the program’s inherent unfairness to urban areas.  Most importantly for cities like Hoboken, the bill would acknowledge the unique challenges faced in urban areas by providing premium reductions for partial mitigation measures, like raising utilities and mechanical equipment where it is not practical to raise an entire building, and by treating existing garden level homes as residential units.”

Joseph Della Fave, Executive Director, Ironbound Community Corporation:

“Senator Menendez’s bill gets it exactly right, which is why it has the support of Senator Booker as well as a bipartisan coalition of Republican and Democratic Senators across the country. The Menendez SAFE Act dramatically boosts investments in resiliency, recognizing that every dollar spent in prevention ultimately saves over 4 dollars. It attacks skyrocketing premiums by capping their increase at 10% a year, so that not just homeowners but also the many full-time renters, for whom these costs are passed on to, have a fighting chance. While offering resources to fortify older buildings, it maintains high flood resiliency standards for new construction. And it has a broad vision of flood resiliency that corrects for the current system’s overlooking of the specific resiliency needs of urban communities.”

Doug Quinn, Activist and Sandy Victim:

“Senator Menendez crafted a hard-hitting bill that will make sure no other storm victim has to live through the tragedy endured by the Sandy victims. Unlike the other watered-down proposals in the House and the Senate, this ball has real teeth to protect the American public and ensure that integrity is restored to the national flood insurance program. Any taxpayer or policyholder who is serious about reform needs to call their Senators and Congressman today and demand passage of the SAFE bill. Again, demand the SAFE bill, not any of the imposter bills out there.”  

Michael J. Darcy, CAE, Executive Director, New Jersey State League of Municipalities: 

“This legislation addresses a need that the League of Municipalities formally recognized at our Annual Conference, just last November. That need found expression when Resolution 2016-01 was unanimously adopted by representatives of our 565 member municipalities.

“Absent passage of the reforms found in S.1368, the continued rate increases, inconsiderate of a property owner’s ability to pay, will have a devastating impact on families and a negative affect municipalities nationwide. That impact will be felt by real estate markets, banks and mortgage companies, elderly citizens living on fixed income, and policyholders, who built their communities with faith in the National Flood Insurance Program, as it was administered at the time.

“Your attention to this matter is greatly appreciated. We will let our members know of this. Please let us know how we can help to advance this common sense reauthorization.”

Kevin Walsh, Executive Director of the Fair Share Housing Center:

“This legislation would protect homeowners from the kind of abuses New Jerseyans saw after Superstorm Sandy.  The bill would help speed payments to homeowners trying to rebuild after a natural disaster, while also ensuring that they are fairly compensated and giving them avenues to appeal insurance company decisions.  This proposal would also keep the Jersey Shore affordable to working families by limiting increases in homeowner insurance premiums.”

Susan Marticek, Executive Director, Ocean County Long-Term Recovery Group:

“Very excited to see Sen Menendez’s legislation because it takes into account all of the hard-learned lessons from Sandy, and implements changes that will directly benefit policyholders in the aftermath of a disaster and expedite recovery for both the individual as well as the community at large.  The pre-disaster aspects of this bill will go a long way to make our communities more resilient and save a tremendous amount of tax dollars in disaster recovery aid.  The post-disaster reforms show the admirable degree to which Senator Menendez truly listened to the advocates and Sandy victims on the ground, carrying those lessons into his bill to ensure that disaster victims are at the center of FEMA’s response and that the failures of the NFIP claims process following Sandy are not replicated in the future. We fully endorse this bill and need it now more than ever.”

Amy Bach, Esq., Executive Director of United Policyholders:

“Senator Menendez has been in the flood recovery and insurance trenches with home and business owners for many years.  His proposed legislation distills lessons learned into reforms that will restore confidence and integrity to this essential program.”

Amanda Devecka-Rinear: Director, New Jersey Organizing Project:

“After Superstorm Sandy, thousands of families struggled and learned hard lessons about our recovery programs, including the National Flood Insurance Program.  Senator Menendez’s legislation applies what we learned in order to make sure no families suffer like ours in the future.  It’s forward-looking and invests in mitigation and prevention to safeguard families from losing everything, to ensure protection from flood disasters isn’t out of reach, and to make rates more affordable.”

Melissa H. Luckman, Esq., Director of the Disaster Relief Clinic at Touro Law Center:

“The NFIP reauthorization bill introduced by Senator Menendez speaks directly to the shortfalls of the NFIP post Sandy.  This bill will ensure that the fraud, deceit, and mismanagement of the NFIP faced after Sandy never happen again.  Senator Menendez has been relentlessly advocating on behalf of all Sandy survivors since immediately post-Sandy through the Sandy Task Force, which forced FEMA to re-open all 144,000 NFIP insurance claims and to date has paid out over $208 million.  This bill is the culmination of four-and-a-half years of spending countless hours listening to boots-on-the-ground constituent circumstances, and providing real and thorough reforms to ensure that policyholders have a voice and are protected in future flooding events.  I completely support all of the protections afforded to homeowners in this bill.”

Lisa Sharrard, former So. Carolina NFIP Coordinator, owner of Choice Flood Insurance:

“Senator Menendez’s proposed legislation contains very important consumer protection upgrades.  Agents have direct contact with policyholders and by improving training, and having a logical structure to provide feedback to FEMA, the Administrator and companies will greatly improve the policyholder experience.”

After Superstorm Sandy, Sen. Menendez’s primary legislative goal was to create concrete, sustainable reforms to the NFIP program that would benefit all New Jerseyans.  He authored the Superstorm Sandy Relief and Disaster Loan Program Improvement Act, signed into law last November, which extended and expanded access to federal disaster loans through the U.S. Small Business Administration (SBA).  In 2014, his Homeowner’s Flood Insurance Affordability Act was signed into law to address skyrocketing rates many Sandy survivors were encountering.  In 2013, he spearheaded the original $60 billion federal Sandy aid package through Congress.