Annual flood insurance rate increases would be capped at 9% under a bipartisan bill to reform the National Flood Insurance Program expected to be introduced Friday, the ninth anniversary of Superstorm Sandy.
The National Flood Insurance Reauthorization Act of 2021 is being introduced by
It marks the senator's latest attempt to craft a long-term renewal of the flood insurance program that would stress mitigation and limit what he termed "rate shock," the sharply rising premiums that will impact many policyholders under rules.
The flood insurance program covers about 217,200 homes in
Risk Rating 2.0 went into effect for new homebuyers on
"I rang the alarm bells before they put it out," Menendez said of Risk Rating 2.0. "By having rate shock, you create a group of people who are not going to be able to afford it."
He said 77% of
Menendez said soaring rates will lead more residents of flood-prone areas to drop flood insurance coverage, making policies even more expensive for those who remain. The senator noted that the nonpartisan
That's nearly 20% of the estimated 5 million
Menendez's bill would:
Reauthorize the National Flood Insurance Program for five years, through
Provide vouchers for low- and middle-income homeowners and renters, if their flood insurance payments become too expensive for them to afford;
Freeze interest payments on the flood insurance program's debt and reinvest the savings into mitigation efforts;
Raise the amount of money available to flood insurance policyholders who wish to make mitigation efforts at their properties, including elevating their homes. Property owners could access up to
Increases funding for
Caps the amount of money private insurers who issue flood policies can make;
Makes changes to the claims process to incorporate lessons learned from Sandy, including holding
Rates were determined by pooling the risk of groups of properties in designated flood zones; that means the owner of a
The new program uses mapping data and science to charge premiums on individual homes based on the value of each property and its unique flood risk.
Some Shore residents and public officials have complained in recent years that
Advocates say that increasing flood insurance rates without providing funds to help homeowners elevate their homes or pay for other mitigation efforts will not help reduce the risk of higher financial losses from storms.
Under Risk Rating 2.0, about two-thirds of policy holders will see their premiums stay the same or rise up to
About 11% of policy holders will see premiums rise more than
But Menendez and
Menendez' repeated efforts to reform the flood insurance system have previously failed in part, he said, because
He said he believes
"I think that combination of bipartisanship now, and the combination of Risk Rating going into effect, and many members hearing from their constituents," gives the bill a better chance to move forward, Menendez said.