Right Now, Feds Are Piecing Together Plans To Overhaul The National Flood Insurance Program That Dictates Insurance Premiums Across SI For Tens-Of-Thousands Of Households

Standing along a Staten Island row of homes, and with homeowners, U.S. Senator Charles Schumer opened the federal floodgates and sounded the alarm on an under-the-radar plan to 'reform' the National Flood Insurance Program (NFIP), which continues to quietly slosh through the federal government, and could outright soak Staten Islanders with increased premiums and lower property values. Schumer explained the full plan and detailed how it would use private sector data in a way that unfairly puts a bullseye on Staten Island and other places across New York. The Senator demanded the administration immediately halt this plan until key questions rooted in protecting Staten Island homeowners and the local housing economy are answered.

"FEMA has just come out with a May update on its broad plans to "redesign the risk rating system" and "fundamentally change the way" the NFIP works, but this entire update is just two single pages and that has me worried for homeowners across Staten Island," said U.S. Senator Charles Schumer. "It makes no sense for the administration to think that they can propose major reforms on how we pay for flood insurance, and how it impacts property values on Staten Island, without presenting its plan here on the Island and answering a litany of questions by Congress."

Schumer presented what little detail has been released publicly about the plan and detailed how it would likely try to use data and metrics in ways that could unfairly put a bullseye on Staten Island. The Senator demanded the administration immediately halt this plan, come to Congress and to Staten Island to discuss such 'reforms' and answer key questions critical to SI homeowners and the local housing economy before it is too late.

Specifically, Schumer wants FEMA to answer at least four questions ASAP centered on costs, data gathering, affordability and how such changes would work with broader reforms:

1) How will these new rates be calculated and what is the full criteria considered as part of the calculation?

2) How does FEMA define "logical rating variables" and how many private data companies will be gathering and measuring data, and who will independently peer review such data?

3) Has the agency considered the systemic implications of insurance rates that could spike and the impact on homeowners and property values in vulnerable communities? If so, how would the agency possibly assist homeowners facing unaffordable premiums?

4) What, if anything, will FEMA do to ensure better oversight of insurance companies participating in the NFIP and guarantee that individuals are actually receiving the flood protection from the system they've been paying into?

Schumer explained that at present the entire new Risk Rating 2.0 plan that's been made available to the public consist of just a one-page overview and a one-page list of FAQs and that without a halt to these backroom plans and with consultation from Congress, the new rates for all single-family homes will go into effect nationwide on October 1, 2020.

"I have long been pushing for the NFIP to be improved, but we cannot try to prop up the program on the backs of Staten Islanders, who, under this plan, would likely become the bullseye of back-breaking costs," Schumer added.

The administration's plan would begin to assess properties individually according to what they call 'logical rating variables." Schumer says FEMA has not yet laid out all the variables that make up the logical criteria, and how they would be weighed. FEMA would also take into account the replacement costs of homes, which would increase premiums for higher valued properties and decrease them for lower valued ones. This plan could potentially impact millions of single-family policyholders of public flood insurance.

NFIP currently covers approximately 5 million policyholders nationwide and thousands across Staten Island.

"The NFIP was set to expire at midnight on Friday, May 31st but the President signed a bill that same day to extend the National Flood Insurance Program through June 14th. The Senate also passed the NFIP extension as an insurance policy prior to congressional recess. The House is expected to pass a disaster relief package upon its return from recess this week, which includes an extension of the NFIP until September 30th. The NFIP is integral to protecting hard-working Americans and insuring their properties, and while agency reforms are necessary, specifically targeting Staten Island homeowners is entirely unjust," Schumer argued.

Schumer has pushed for reforms as part of a long-term reauthorization of the flood program, which included: an NFIP that provides homeowners with flood protection for a stable and fair cost, more accurate flood maps that utilize the best technology and sound data, stricter controls placed on lawyers who seek to defend insurance companies against homeowners, and better oversight of insurance companies participating in the NFIP.

Schumer has long fought to protect NFIP policyholders throughout New York. In 2015, Schumer even urged FEMA to scrap the decades-old Write-Your-Own (WYO) insurance model from the NFIP and move forward to overhaul the process entirely so that flood insurance policyholders in New York and across the country benefited from consistent coverage and providers that were not incentivized to fight their claims. The WYO model has been in place since 1983 and allows participating insurance companies to write and service policies in their own names. While the WYOs are subject to NFIP's rules and regulations, Schumer explained that often times the companies are servicing flood insurance claims with the same profit-driven mentality as they would have for their other lines of business, and as a result unfairly reducing payments to homeowners.

Read this original document at: https://www.schumer.senate.gov/newsroom/press-releases/schumer-reveals-under-the-radar-fed-plan-to-reform-national-flood-insurance-program-could-soak-siers-with-increased-premiums-and-lower-property-values-plan-would-use-data-in-a-way-that-unfairly-puts-a-bullseye-on-si-homeowners-senator-demands-admin-immediately-halt-plan_answer-key-questions-now-