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Pallone, Pascrell Announce Bipartisan Flood Insurance Legislation

October 29, 2021
Press Release
The bill protects homeowners from skyrocketing premiums

Washington, DC – Today, Congressman Frank Pallone, Jr. (D-NJ-06), Congressman Bill Pascrell, Jr. (D-NJ-09), and Congressman Clay Higgins (R-LA-03) announced the National Flood Insurance Program Reauthorization and Reform Act of 2021. The National Flood Insurance Program (NFIP) is a lifeline to thousands of U.S. households that are ravaged by floods every year. The bill makes the program more affordable, creates greater transparency, and injects fairness into the claims process. Senators Bob Menendez and Cory Booker of New Jersey will introduce a companion bill in the Senate. 

“Superstorm Sandy devastated New Jersey nine years ago, and my constituents still know all too well how important a flood insurance program is after major flooding events. After the storm, insurance companies outright refused to make good on their promises to policyholders and instead pointed to the fine print while denying families who had lost everything. The National Flood Insurance Program must be both affordable and fair – otherwise it just doesn’t work. This bill delivers a long-term flood insurance program reauthorization that improves the program based on the realities of major weather events like Sandy,” said Congressman Pallone. “This legislation will go a long way to strengthen our flood insurance program so that homeowners in my district are protected from the devastating effects of future flooding.”

“We know New Jerseyans got screwed with red tape that slowed our recovery after Hurricane Sandy,” said Congressman Pascrell. “I remember Sandy’s devastation like it was yesterday. Our neighbors saw their entire lives swept away in an instant. The new Risk Rating program FEMA is unilaterally imposing will increase premiums for over 170,000 policy holders in New Jersey. Our bipartisan bill will make the program more affordable and fairer. Additionally, our legislation has safeguards to stop premiums from being jacked up; it will help people prepare prior to a storm with accurate maps and flood prevention investments; it will strengthen the claims process so survivors get what they need to rebuild; and it will bring much-needed accountability to the Write Your Own program. We owe so much to our flooding victims and are working hard to see these reforms enacted this Congress. I want to especially thank Senator Menendez for his dedication to making our flood insurance program better.”

“It is time Congress stops kicking the can down the road with reauthorizations that do not address the systemic problems plaguing this program. With this legislation, we can make NFIP more sustainable, we can make flood insurance more affordable, and we can hold FEMA and its private contractors more accountable,” said Senator Menendez. “And instead of waiting for the next disaster to strike, we can invest in mitigation that prevents costly flood damage in the first place.”

Comprehensive flood insurance that lowers premiums will provide peace of mind for New Jerseysans.

“The only way I could have afforded to mitigate my home was from the grant money from Superstorm Sandy and the increased cost compliance from my flood insurance. Before the storm I was paying close to $2000 a year and once I elevated it went down to $300 a year. More importantly, I will no longer have to worry that my house will be flooded again,” said Jody Stewart.

When my home was destroyed by Superstorm Sandy, I had the maximum legal amount of flood insurance I could buy - $250,000. Yet still, it took me almost 7 years to get home. My WYO insurance company paid me 37 cents on the dollar, using a controversial engineering firm to falsely claim damage was pre-existing and caused by ‘earth movement’ instead of the three feet of water that flooded my home. The National Flood Insurance Program desperately needs to be fixed,” said Doug Quinn. “We need premiums that we can afford, protection from unscrupulous lawyers, and engineers who work for the program, penalties for insurance companies who underpay victims, and attorney fee shifting so consumers who are forced to sue don’t have to lose one-third of the money needed to rebuild to legal fees. We are counting on our elected officials to produce legislation that will accomplish meaningful reform that represents the best interest of American consumers instead of the insurance companies.” 

The National Flood Insurance Program Reauthorization and Reform Act of 2021 would take concrete steps to improve affordability, transparency, accountability, and the long-term sustainability of the NFIP by:

  • Reauthorizing NFIP for five years and extending the program until September 30, 2026.
  • Ending runaway premium hikes by capping annual rate increases to 9 percent.  Currently, premiums can increase by up to 25 percent a year — which has an adverse effect on property values, creates affordability challenges, and discourages participation in the program. This will put guardrails on FEMA’s new rating methodology, known as Risk Rating 2.0, and prevent a rate shock that would undermine and weaken the flood insurance program and put taxpayers on the hook for even more disaster assistance grants. 
  • Capping Write Your Own (WYO) compensation to ensure private insurance isn’t making hand-over-fist profits at the expense of program sustainability.
  • Instituting a significant number of policyholder protection and fairness provisions to ensure homeowners who faithfully paid their premiums are treated fairly during the claims process.