U.S. Senator Bob Menendez (D-N.J.) and Rep. Frank Pallone (D-N.J.-06) joined today with local leaders, advocates and home owners to announce the introduction of the bipartisan and bicameral National Flood Insurance Program Reauthorization (NFIP-RE) Act of 2023. This legislation would reauthorize the program for five years – providing greater stability for homeowners, small business owners, and the real estate market. It will also implement a series of sweeping reforms to reduce costs, make generational investments in communities to reduce flood risk, and establish a fairer claims process for policyholders – many of which were exposed in the aftermath of Hurricane Sandy.

The NFIP-RE Act of 2023 tackles systemic problems with flood insurance, puts the program back on solid fiscal ground, and reframes the nation’s entire disaster paradigm to one that focuses more on prevention and mitigation to prevent the high cost of rebuilding after flood disasters. Over the last year, the NFIP has lost 100,000 policyholders, and, according to the Associated Press, the program is estimated to lose hundreds of thousands more policyholders over the coming years due to FEMA’s new rating methodology Risk Rating 2.0. This comes as flooding is expected to worsen in the coming decades due to climate change.

“Congress can no longer afford to punt long-term reauthorization and reform of the NFIP. It’s time to put policyholders first and addresses the longstanding systemic issues with the program that came under the national spotlight in the aftermath of Hurricane Sandy,” said Menendez. “With disastrous flooding events becoming all the more common, we must work to create a more sustainable, resilient, and affordable flood insurance program that invests in prevention and mitigation efforts, and all while ensure hard-working Americans can have peace of mind in the event of a disaster.”

“New Jerseyans still know all too well how important a flood insurance program is. After Superstorm Sandy and Hurricane Ida devastated New Jersey communities, insurance companies outright refused to make good on their promises to policyholders and used the fine print to deny families who lost everything,” said Congressman Pallone. “The National Flood Insurance Program must be affordable and fair – otherwise it just doesn’t work. For years, I’ve been warning that Risk Rating 2.0 could be used to unfairly target coastal communities while making flood insurance unaffordable for working families, and that’s exactly what I’m hearing from my constituents. FEMA’s Risk Rating 2.0 is lowering costs for some, but it’s causing thousands of households to drop coverage all together due to rate shocks. This bill will strengthen the program so that homeowners in my district are protected from the devastating effects of flooding. I want to thank my colleagues who have joined me in this effort and am especially grateful to Senator Robert Menendez and Congressman Bill Pascrell, who have been strong and steadfast partners in this process.”

The NFIP-RE Act of 2023 would:

Protect policyholders from exorbitant premium hikes by capping annual increases at nine percent.

• Provide a comprehensive means-tested voucher for millions of low- and middle-income homeowners and renters if their flood insurance premium becomes prohibitively expensive.
• Increase the maximum limit for Increased Cost of Compliance (ICC) coverage to better help policyholders rebuild and implement mitigation projects to reduce costly repetitive flood losses. This coverage helps policyholders meet certain building requirements to reduce future flood damage before they repair or rebuild.
• Increase the maximum limit for Increased Cost of Compliance (ICC) coverage to better reflect the costs of rebuilding and implementing mitigation projects.
• Boosts funding for mitigation grants and modernizes mapping to identify and reduce flood risks.
• Create new oversight measures for insurance companies and vendors, and provides FEMA with greater authority to terminate contractors that have a track record of abuse.
• Reform the claims process based on lessons learned from Superstorm Sandy and other disasters, to level the playing field for policyholders during appeal or litigation, hold FEMA accountable to strict deadlines so that homeowners get quick and fair payments, and ban aggressive legal tactics preventing homeowners from filing legitimate claims.

Joining Sens. Menendez in the Senate in supporting the legislation are Sens.  Bill Cassidy John Kennedy (R-La.), Cory Booker (D-N.J.), Cindy Hyde-Smith (R-Miss.), Kirsten Gillibrand (D-N.Y.), Chris Van Hollen (D-Md.), Roger Wicker (R-Miss.), and Marco Rubio (R-Fla.).

Joining Pallone in the House in supporting the legislation are Reps. Donald Norcross (D-N.J.-01), Jeff Van Drew (R-N.J.-02), Andrew Kim (D-N.J.-03), Josh Gottheimer (D-N.J.-05), Thomas Kean Jr. (R-N.J.-07), Robert Menendez, Jr. (D-N.J.-08), Bill Pascrell (D-N.J.-09), Donald Payne, Jr. (D-N.J.-10), Mikie Sherrill (D-N.J.-11), Bonnie Watson Coleman (D-N.J.-12), Clay Higgins (R-La.-03) and Troy Carter (D-La.-02).

“Homeowners in Sea Bright endured some of the worst damage in New Jersey during Superstorm Sandy. Residents deserve a flood insurance program that is affordable and makes sure that insurance companies are held accountable if homeowners ever need to file a claim,” said Sea Bright Mayor Brian Kelly. “This bipartisan legislation will reform the program so that residents have the peace of mind they need. I want to thank Senator Menendez and Congressman Pallone for fighting for New Jerseyans in coastal communities.”

“Reform of the National Flood Insurance Program is long overdue. As a resident of Ortley Beach, where 99% of the homes were damaged in Superstorm Sandy, I know all too well how important this program is,” said Paul Jeffrey, of the New Jersey Organizing Project. “The struggles we faced in obtaining insurance and FEMA payouts were nothing short of daunting. Beyond the financial impact, the emotional and health impacts were devastating.  We learned a lot from that suffering.  I – along with all my colleagues at New Jersey Organizing Project – are extremely grateful to Senator Menendez and Congressman Pallone for introducing this new legislation to provide larger mitigation grants, an easier claims process, and more oversight of the insurance companies and the contractors, some of whom outright stole our money.”

“New Jersey Realtors® thanks Senator Menendez and Congressman Pallone for leading the way on long-term, common-sense reform to the NFIP, while also looking out for the concerns we hold regarding Risk Rating 2.0 and the potential impacts it may have on homeowners in shore communities,” said Robert White, Immediate Past President, New Jersey Realtors.