Sen. Menendez Questions Witnesses During Banking Committee Hearing on the Affordability of the National Flood Insurance Program

WASHINGTON, D.C. - U.S. Senator Bob Menendez (D-N.J.), a senior member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, participated in a hearing entitled "Reauthorization of the National Flood Insurance Program: Local Perspectives on Challenges and Solutions." Witnesses included Mr. Michael Hecht, President & CEO, Greater New Orleans, Inc.; Dr. Daniel Kaniewski, Managing Director, Public Sector, Marsh McLennan; and the Honorable Steve Patterson, Mayor, City of Athens, Ohio.

The Senator began his questioning by asking the witnesses about the affordability of flood insurance for working families.

"Since FEMA recently changed its rating methodology, the program has lost 150,000 policyholders. FEMA itself has estimated that it will lose 1 million policyholders by the end of the decade due to the premium increases. In Paterson, New Jersey, where the median household income is $50,000 a year, policyholders will see their premiums increase from an average of $1,500 a year to an average of $4,000 a year. In Keansburg, New Jersey, where the median household income is $76,000, 1,000 policyholders will go from an average of $1,300 to $3,500. The list goes on. So, Mr. Hecht, Mayor Patterson, can working families handle these types of increases?"asked Sen. Menendez.

The Senator also spoke about how his NFIP RE-Act would help working families afford flood insurance to ensure they are able to protect their homes.

"The NFIP RE-Act introduced myself, Senator Cassidy, Senator Kennedy, and a whole bunch of others on a bipartisan basis, lowers the statutory cap to 9 percent - the average annual increase that policyholders have seen since the Homeowner Flood Insurance Affordability Act of 2014 was signed into law. It also creates a voucher program to help families buy into the program. And endless increases help no one remain in their homes if there is unmitigated and uninsured consequences. A long-term reauthorization of the program must include robust funding, as I think you've all talked about, for mitigation to decrease the risk profile of the program and provide a sound financial future for it. If we know right now which homes are most at risk, we shouldn't wait until a flood to step in and help. For every dollar of mitigation, the federal government saves seven dollars in disaster relief payments," said Sen. Menendez.

Sen. Menendez has long been a leader in the fight to increase flood protections for New Jersey residents. In July, the Senator joined Rep. Frank Pallone and 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 all based on lessons from Hurricane Sandy.

In March, Sen. Menendez joined with Rep. Frank Pallone, Jr. to hold a groundbreaking ceremony with the U.S. Army Corps of Engineers and the New Jersey Department of Environmental Protection (NJDEP) for the Union Beach flood control project to reduce flooding and better protect the area from rising seas and future catastrophic weather events. In March, Senators Menendez and Kennedy introduced the National Flood Insurance Program (NFIP) Consultant Accountability Act of 2023 to protect homeowners who are victims of natural disasters from working with third parties that are found guilty of property damage assessment fraud.

During a Senate Banking Committee hearing in April, Sen. Menendez emphasized the importance of keeping flood insurance affordable to lower housing costs for working families and highlighted the need to pass his bipartisan National Flood Insurance Program Reauthorization and Reform (NFIP RE) Act. In the same month, Sens. Menendez, Cory Booker, Kristen Gillibrand and Senate Majority Leader Chuck Schumer introduced the New York-New Jersey Watershed Protection Act to improve water quality and increased flood protections for residents near these vital water resources.

Sen. Menendez has been the leading advocate in Congress for an overhaul of the National Flood Insurance Program (NFIP), since Superstorm Sandy devastated New Jersey more than 10 years ago. 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, the Senator shepherded the original $60 billion federal Sandy aid package through Congress.

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