Sen. Schumer: Flood Insurance Program, So Important to Many in NYC, Is Now Teetering in Congress & Expires Sept 30th If No Action Is Taken

WASHINGTON, Aug. 30 -- The office of Sen. Charles E. Schumer, D-N.Y., issued the following news release:

On the heels of Hurricane Harvey and amidst Superstorm Sandy flashbacks, U.S. Senator Charles Schumer demanded Congress prevent the National Flood Insurance Program (NFIP) from expiring. Schumer said that without swift action, come September 30th, New York City and flood-prone communities and cities across America could be in jeopardy. While the NFIP covers more than a hundred thousand in New York State, including many across the city, the program's future remains at risk and Schumer warned that any lapse in the program could leave New York City, many of whom were devastated by Superstorm Sandy, vulnerable as this year's hurricane season continues to loom with predictions that put New York at greater risk for seeing a major storm.

"Right now the entire nation is awestruck by the cataclysmic damage delivered by Hurricane Harvey and our hearts are heavy for Texans in its path. For those of us here in New York, flashbacks of Sandy are made vivid by the torrent of Harvey. That is why, as this dangerous storm continues to churn, and as hurricane season itself continues to spin, we cannot and must not allow the national flood insurance program to expire," said U.S. Senator Charles Schumer. "While the NFIP is in desperate need of improvements -- from protecting homeowners from outrageous premiums and storm victims from fraud and abuse -- the program cannot be allowed to lapse, because then tens-of-thousands of New Yorkers and millions of Americans would be in jeopardy."

Schumer continued, "New York City depends upon the NFIP and in order to ensure that it continues to work as it should, it first must be up and running if, god forbid, another hurricane were to head for us. That is why I am urging Congress to extend this program and work across the aisle to get it done."

The NFIP covers approximately 5 million policyholders nationwide, including approximately 186,235 in New York State. Schumer's message today was simple: while the NFIP should be improved, it cannot be allowed to lapse.

FEMA provides homeowners with flood insurance through the NFIP, which was established by Congress in 1968 because most private insurers have simply stopped offering flood insurance policies. According to FEMA: "The National Flood Insurance Program aims to reduce the impact of flooding on private and public structures. It does so by providing affordable insurance to property owners and by encouraging communities to adopt and enforce floodplain management regulations. These efforts help mitigate the effects of flooding on new and improved structures. Overall, the program reduces the socio-economic impact of disasters by promoting the purchase and retention of general risk insurance, but also of flood insurance, specifically."

The last NFIP reauthorization passed in 2012. Between 2008-2012, the program was extended 17 times and lapsed 4 times. With its expiration quickly approaching, Schumer said that Congress must quickly pass a reauthorization before the program lapses next month. Schumer said that if Congress fails to act, a lapse in NFIP would mean uncertainty that ranges from individuals not being able to purchase a new home because that home requires flood protection to homeowners at risk of drastic flood damage not being able to renew their flood coverage, and many more questions as to how the program would function during the middle of hurricane season.

Schumer has long fought to protect NFIP policyholders throughout New York. In 2015, Schumer 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 are benefited in the future. The WYO model has been in place since 1983 and allows participating insurance companies to write and service policies in their own names. There are currently over 870 different companies that sell policies. 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.

Specifically, Schumer pointed to the months-long investigation aired by '60 Minutes' which brought to light evidence that private engineering companies altered engineering reports so as to not fully reflect the true impact and damage caused by Superstorm Sandy to New York homes, leading to the unjust denial or underpayment of flood insurance claims. These engineering firms were contracted by WYO flood insurance companies. Schumer today said that the widespread fraud regarding legitimate flood insurance claims handled by WYO insurance companies following Superstorm Sandy highlights major flaws with the WYO program. In his letter to FEMA, Schumer called to eliminate the WYO flood insurance model entirely.

Schumer, today, made clear that while the NFIP was not perfect and certainly in need of improvements, nevertheless it must be extended. Allowing the program to lapse amidst hurricane season would be irresponsible and could wind up costing NYC homeowners and businesses dearly, he said.