Legislation would reform NFIP, ensure affordability and sustainability, and invest in flood mitigation and prevention

On the ninth anniversary of Superstorm Sandy slamming New Jersey, U.S. Rep. Bill Pascrell, Jr. (D-NJ-09) and Senators Bob Menendez (D-NJ) and Cory Booker (D-NJ) 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 on the NFIP, including 220,000 New Jerseyans. U.S. Rep. Frank Pallone, Jr. (D-NJ-06) is the prime sponsor of the legislation in the House of Representatives.

"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."

"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."

"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."

"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."

The federal lawmakers were joined by Paterson Mayor Andre Sayegh, New Jersey Organizing Project (NJOP) Board President Joe Mangino, NJ Realtors[TM] 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."

"NJ Realtors[TM] thanks Senator Menendez, Senator Booker and Congressman Pascrell for their important work on reforming the National Flood Insurance Program," said Ilene Horowitz, NJ Realtors[TM] Federal Political Coordinator. "We applaud their efforts to mitigate the impact that risk rating 2.0 could have on current homeowners and potential first time home buyers."

The National Flood Insurance Program Reauthorization and Reform Act of 2021 would take concrete steps to improve affordability, transparency, accountability, and the long-term sustainability of the NFIP by:

* Reauthorizing NFIP for five years and extending the program until September 30, 2026.

* Ending runaway premium hikes by capping annual rate increases to 9 percent. Currently, premiums can increase by up to 25 percent a year -- which has an adverse effect on property values, creates affordability challenges, and discourages participation in the program. This will put guardrails on FEMA's new rating methodology, known as Risk Rating 2.0, and prevent a rate shock that would undermine and weaken the flood insurance program and put taxpayers on the hook for even more disaster assistance grants.

* Capping Write Your Own (WYO) compensation to ensure private insurance isn't making hand-over-fist profits at the expense of program sustainability.

* Instituting a significant number of policyholder protection and fairness provisions to ensure homeowners who faithfully paid their premiums are treated fairly during the claims process.

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. Rep. Pascrell has railed against a rushed implementation of Risk Rating 2.0, which could have disastrous effects on policyholders in New Jersey. In March, Reps. Pascrell and Pallone sent a letter to Homeland Security Secretary Alejandro Mayorkas urging the National Flood Insurance Program's Risk Rating 2.0 implementation be postponed to ensure transparency in the process and fairness for New Jersey policyholders. Pascrell and Pallone also led legislation to extend the NFIP for five years, address the waste, abuse, and mismanagement plaguing the system, and cap annual rate increases at 9%.

Read this original document at: https://pascrell.house.gov/news/documentsingle.aspx?DocumentID=4908