July 17, 2019

Warren Joins Menendez, Colleagues in Unveiling Comprehensive Flood Insurance Reform Bill

Legislation Extends National Flood Insurance Program for 5 Years, Institutes Sweeping Reforms to Make it More Sustainable, Affordable, Fair & Efficient

Bipartisan Companion Legislation Will be Introduced in the House

Bill Text (PDF)

Washington, DC - United States Senator Elizabeth Warren (D-Mass.) joined Senator Bob Menendez (D-N.J.) and a bipartisan group of their Senate colleagues in unveiling new, comprehensive legislation to extend the National Flood Insurance Program (NFIP) for five years while instituting a series of sweeping reforms to address the waste, abuse and mismanagement plaguing the system. More than five million American families depend upon the NFIP -- including over 61,000 across 330 communities in Massachusetts -- which Congress must reauthorize before it expires on Sept. 30, 2019.

The National Flood Insurance Program Reauthorization and Reform Act of 2019 (NFIP Re) tackles systemic problems with flood insurance, puts it back on solid fiscal ground, and reframes the nation's entire disaster paradigm to one that focuses more on prevention and mitigation in order to spare the high cost of rebuilding after flood disasters. 

In addition to Senators Warren and Menendez, the NFIP Re of 2019 is being introduced with broad, bipartisan support, including the following original cosponsors: Bill Cassidy (R-La.), Cory Booker (D-N.J.), John Kennedy (R-La.), Marco Rubio (R-Fla.), Kirsten Gillibrand (D-N.Y.), Jack Reed (D-R.I.), and Chris Van Hollen (D-Md.).

Bipartisan companion legislation is being introduced in the House of Representatives by Reps. Frank Pallone, Jr. (D-N.J.) and Clay Higgins (R-La.) and is co-sponsored by Reps. Bill Pascrell, Jr. (D-N.J.), Albio Sires (D-N.J.), Mikie Sherrill (D-N.J.), Jeff Van Drew (D-N.J.),  Bonnie Watson Coleman (D-N.J.), Donald Payne, Jr. (D-N.J.), Josh Gottheimer (D-N.J.), Tom Malinowski (D-N.J.), Donald Norcross (D-N.J.), Chris Smith (R-N.J.), Andy Kim (D-N.J.), Debbie Mucarsel-Powell (D-Fla.), Charlie Crist (D-Fla.), and Stephanie Murphy (D-Fla.).

"With rising sea levels and heavier rainfalls bearing down on our communities, it's critical that we reform our flood insurance program to reduce financial risk for families and bring people the peace of mind they deserve," said Sen. Warren. "That's why I'm pleased to support this legislation, which would take several steps to improve resiliency, and tackle the waste, and mismanagement plaguing our current flood insurance system."

"We've witnessed the NFIP fail our constituents in their greatest hour of need and, after countless reauthorizations that simply kick a broken can down the road, we want real reform," said Sen. Menendez, a senior member of the Senate Banking Committee that oversees the NFIP and chair of the Sandy Task Force. "With the National Flood Insurance Reauthorization and Reform Act of 2019, we can make the program more sustainable, more affordable, hold FEMA and private contractors accountable, and invest in the kind of forward-looking mitigation that reduces risk and prevents costly flooding in the first place."

"This legislation ensures the NFIP works for the homeowners that depend on it," said Dr. Cassidy. "The reforms in this bill are critical to any reauthorization effort to make the program sustainable and prevent families from being hit with drastic premium increases."

"More than five million Americans depend on the National Flood Insurance Program to protect their homes and businesses.  For many people, this program is as essential as air and water," said Sen. Kennedy.  "Louisiana has been home to people for centuries. Louisiana energy jobs are helping the U.S. end its reliance on foreign oil.  Through common sense reforms, we can create a flood insurance program that continues to protect people's homes at affordable rates while remaining solvent."

"Our National Flood Insurance Program is broken, and New Yorkers who live and work in coastal communities are demanding that Congress solve this problem now. With hurricane season already here and sea levels rising on our coasts, we must act quickly to fix the program and give Americans the relief they need," said Sen. Gillibrand. "I am proud to be an original cosponsor of this bipartisan bill to make our National Flood Insurance Program stronger, and I urge all of my colleagues to join me in fighting to pass it."

"The National Flood Insurance Program is vitally important to my home State of Florida as it holds more than one-third of total policies nationwide," Sen. Rubio said. "This bill provides long-term stability, while delivering much needed reforms to protect the program's policyholders. The federal government must take a more proactive approach in addressing the underlying risk affecting flood prone communities, and unfortunately, instability has long plagued the program. I am proud to have worked with this bipartisan group to make our National Flood Insurance Program more practical, sustainable and accountable."

"Reauthorizing our national flood insurance program is crucial to protecting our communities from severe weather. From hardening our infrastructure to helping our towns rebuild, this legislation includes critical updates that will allow FEMA to better serve families and businesses in Maryland and across the country. It is particularly important for areas like Ellicott City, which has been ravaged by historic floods, and low-lying communities along the Chesapeake Bay. I will continue working to strengthen our state's flood infrastructure so communities in our state have the security they need and deserve," said Sen. Chris Van Hollen. 

"My constituents know all too well that a fair flood insurance program is critical for rebuilding in the wake of destructive storms. After Superstorm Sandy, 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. New Jerseyans deserve a long-term flood insurance program reauthorization that improves the program based on the realities of major weather events like Sandy," Rep. Pallone said. "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."

"Home and business owners in South Louisiana and across the country rely on the NFIP to protect their property and provide affordable flood insurance," said Rep. Higgins. "A long-term reauthorization, in the form of the SAFE NFIP Act, will provide policyholders with greater certainty and allow necessary reforms to improve the program. The SAFE NFIP Act protects affordability, prioritizes pre-disaster mitigation, improves flood plain mapping, and ensures long-term sustainability. Our legislation has bipartisan support from many coastal lawmakers, and I want to thank Congressman Pallone for his continued work on this issue."

"I remember touring the devastation of Sandy like it was yesterday. Homes damaged. Businesses destroyed. The mold. The sand. The debris. I spoke with my constituents who saw their entire lives swept away in an instant. I vowed that day never to stop fighting for them," said Rep. Pascrell. "Our bipartisan, bicameral legislation will do a lot. Thanks to the hard work of Senator Menendez and Congressman Pallone, our bill helps people prepare prior to a storm with accurate maps and flood prevention investments. It strengthens the claims process so survivors get what they need to rebuild. It gives affordability safeguards to stop premiums from being jacked up. And it brings much-needed accountability to the Write Your Own program. We will be fighting hard to make sure we pass these changes into law. We owe it to Sandy victims."

The National Flood Insurance Program Reauthorization and Reform (NFIP Re) Act of 2019

  • Long-Term Certainty. Reauthorizes the NFIP for five years, providing certainty for communities.
  • No Steep Rate Hikes under Risk Rating 2.0. Protects policyholders from exorbitant premium hikes by capping annual increases at 9%. Currently, premiums can more than double every four years or less, and FEMA's new methodology, called Risk Rating 2.0, will fundamentally alter premiums on every policy in the country.
  • 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.
  • Path to NFIP Solvency. Freezes interest payments on the NFIP debt and reinvests savings towards mitigation efforts to restore the program to solvency and reduce future borrowing.
  • Limits on Private Insurance Company Profits. Caps Write Your Own (WYO) compensation at the rate FEMA pays to service its own policies and redirects the savings to pay for the means-tested affordability program.
  • Increased Cost of Compliance (ICC) Coverage. Increases the maximum limit for ICC coverage to better reflect the costs of rebuilding and implementing mitigation projects. In addition, ICC coverage eligibility is expanded in order to encourage more proactive mitigation before natural disasters strike.
  • Strong Investments in Mitigation. Provides robust funding levels for cost-effective investments in mitigation, which have a large return on investment and are the most effective way to reduce flood risk.
  • More Accurate Mapping. Authorizes funding for Light Detection and Ranging (LiDAR) technology for more accurate mapping of flood risk across the country, reducing confusion and generating better data.
  • Oversight of Write Your Own (WYO) Companies. Creates new oversight measures for insurance companies and vendors, and provides FEMA with greater authority to terminate contractors that have a track record of abuse.
  • Claims and Appeals Process Reforms Based on Lessons from Sandy. Fundamentally reforms the claims process based on lessons learned in Superstorm Sandy and other disasters, to level the playing field for policyholders during appeal or litigation, ban aggressive legal tactics preventing homeowners from filing legitimate claims, hold FEMA to strict deadlines so that homeowners get quick and fair payments, and end FEMA's reliance on outside legal counsel from expensive for-profit entities.
  • Better Training. Provides for increased training and certification of agents and adjusters to reduce mistakes and improve the customer experience.