Senators Introduce Amendment To Reform National Flood Insurance Program

U.S. Senators Bob Menendez (D-N.J.) and John Kennedy (R-La.) today introduced an amendment that will tackle systemic problems with the National Flood Insurance Program (NFIP), invest in cost saving disaster mitigation and prevention and ensure its affordability for middle-class homeowners.

Both senators, whose states have been hit hard by natural disasters, have long been champions for comprehensive NFIP reform.

"In order to protect hardworking homeowners and ensure our nation is prepared for future storms, it's vital that we make these reforms to the National Flood Insurance Program," said Sen. Menendez. "I urge my colleagues to pass this amendment so we can ensure the NFIP is more sustainable and affordable for homeowners and that there are more resources for preventative mitigation measures."

"Louisianians are resilient, but they depend on affordable flood insurance to protect and rebuild their homes. FEMA is planning to raise flood insurance rates on Louisianians but refuses to explain how or why," said Sen. Kennedy. "It's urgent that the Senate adopt this amendment to keep premiums from skyrocketing and to help protect Louisiana communities from future floods."

The amendment includes:

* Premium Hike Cap

Currently, premiums can more than double every four years but this amendment will protect policyholders from exorbitant premium hikes by capping annual increases at 9%.

* Robust Mitigation Investment

Provides $25 billion in Community Development Block Grant Disaster Recovery (CDBG-DR) funding for states to invest in mitigation and prevention projects.

* NFIP Debt Interest Freeze

Freezes interest payments on the NFIP debt and reinvests savings towards mitigation efforts to restore the program to solvency and reduce future borrowing.

* Affordability for Low- and Middle-Income Policyholders

Provides a comprehensive means-tested voucher for millions of low- and middle-income homeowners and renters if their flood insurance premium causes their housing costs to exceed 30% of their Adjusted Gross Income, significantly increasing the affordability of the NFIP program.

Sens. Cindy Hyde-Smith (R-Miss.), Bill Cassidy (R-La.) and Cory Booker (D-N.J.) also co-sponsored the amendment, which, if passed, will be included in the bipartisan infrastructure bill.

In June, Sens. Menendez and Kennedy introduced the National Flood Insurance Program Consultant Accountability Act, which would enhance the Federal Emergency Management Agency's (FEMA) ability to protect homeowners from parties found guilty of fraud that involved in NFIP property damage assessment.

In 2019, the senators introduced the National Flood Insurance Program Reauthorization and Reform (NFIP Re) Act of 2019 to tackle systemic problems with flood insurance, lower the cap on annual premium increases to ensure policies are affordable for homeowners, put the NFIP back on solid fiscal ground, and reframe the nation's entire disaster paradigm to one that focuses more on prevention and mitigation to spare the high cost of rebuilding after flood disasters.

Sen. Menendez first exposed the problem of widespread lowballing of flood insurance claims during Congressional hearings he chaired in 2014, and then successfully pushed FEMA to reopen every Sandy flood insurance claim for review, which compensated Sandy victims with more than $260 million in additional payments they were initially denied.

Sen. Menendez authored the Superstorm Sandy Relief and Disaster Loan Program Improvement Act, which extended and expanded access to federal disaster loans through the U.S. Small Business Administration (SBA). His Homeowner's Flood Insurance Affordability Act was signed into law in 2014 to address skyrocketing rates many Sandy survivors were encountering. In 2013, he shepherded the original $60 billion federal Sandy aid package through Congress.