NJ Democrats, Louisiana Republicans, Others in Bid to Improve Flood Insurance

Tom Johnson | July 22, 2019 | Energy & Environment
With the National Flood Insurance Program set to expire, Sen. Bob Menendez says joint effort is ‘a chance to fix what’s broken’

Bob Menendez
Is Congress ready to enact a long-term reauthorization of the National Flood Insurance Program that protects the real estate investments of more than 5 million Americans and 220,000 New Jersey residents?

A contingent of New Jersey lawmakers are hoping so, unveiling a bill last week that would not only reauthorize the program for five years, but also aims to address waste, abuse and mismanagement in it, problems that have led to delays in recovery for countless victims of Hurricane Sandy.

The bill — with the bipartisan support of Louisiana Republicans and others — faces a tough fight winning reauthorization from a badly divided Congress that has been unable to agree on changes to the program, and instead has granted 10 short-term extensions of it in just the past two years.

“We want real reform,’’ said Sen. Bob Menendez, the Democrat from New Jersey who has been working on the issue for years. “The upcoming expiration of the NFIP on Sept. 30 is a chance to fix what’s broken.’’

Menendez argued the new bill would fix the program for middle-class families that have seen insurance premiums spike in recent years, make private contractors more accountable, and invest more funds in mitigation efforts to reduce risk and prevent costly flooding.

Trying to keep a lid on premiums

The legislation also provides for a cap on how much premiums could rise in any year, to mitigate a trend advocates say has reduced participation in the flood insurance program because people can no longer afford the premiums. It would cap annual premium increases to 9 percent, much lower than the 18 percent now allowed.

“We need some kind of cap — something that works better than what is in current law,’’ said U.S. Rep. Frank Pallone, a Democrat from Monmouth County, who is trying to steer the legislation through the House. A different and less ambitious bill already has been released by a House committee, but Menendez noted it has no cap on annual premium increases.

The Menendez version has won backing from the two Republican senators from Louisiana — Sens. Bill Cassidy and John Kennedy.

“We have real dollars for ongoing mitigation,’’ said Cassidy, citing the $400 million the bill would set aside to prevent flood damage. According to the Federal Emergency Management Agency, about 1 percent of all NFIP policies account for 25 percent of flood insurance claims, a well-documented problem where properties incur damage repeatedly, he said.

“This legislation goes a long way so that homeowners in my district are protected from the devastating effects of future flooding,’’ Pallone said. The bill also would cap private insurance company profits.