WASHINGTON — Lawmakers from states threatened by storms unveiled a bill to reform the National Flood Insurance Program that they say is better for consumers than recent legislation passed by the House Financial Services Committee.
The bill is sponsored by three senators Bob Menendez, D-N.J., John Kennedy, R-La., and Bill Cassidy, R-La., and several members of the House, including Reps. Frank Pallone, D-N.J., and Bill Pascrell, D-N.J. It would take further steps to ensure that flood insurance is kept affordable while improving technology to combat flood risks, the lawmakers said during a press conference Tuesday.
“Our plan includes real and lasting reforms that will, one, make premiums more affordable for low- and middle-income Americans, including in high-cost states like New Jersey,” said Menendez. “It will strengthen sustainability by freezing interest payments and making real investments in mitigation, and finally, it will ensure fairness for consumers and more accountability for the insurance industry.”
Most notably, the bipartisan and bicameral plan would cap premium increases at 9% per year, impose deadlines on insurance companies to process flood claims and provide affordability assistance to protect low- and middle-income families.
“I think this bill strikes a fair balance between financial integrity, the National Flood Insurance Program and affordability for policy holders,” said Kennedy.
Congress has debated flood insurance reform for years but to date has settled only on short-term reauthorizations of the NFIP in the absence of a broader legislative package. Homeowners must have insurance in designated flood zones before getting a mortgage.
While each of the lawmakers expressed gratitude for their colleagues who supported a bill that passed the House Financial Services Committee in June, most felt that it would actually make flood insurance more expensive.
The House flood insurance bill sponsored by Chairwoman Maxine Waters, D-Calif.,
But the end result of Waters’ legislation would be soaring premiums, said Menendez. That bill would cap premium increases at 18% a year — double the amount Menendez, Kennedy, Cassidy and others proposed Tuesday.
Pallone said he believes Waters supports the new proposal, noting she “would very much like to see” the lower caps on insurance premiums that exist in the competing legislation.
“We are continuing to work with her and trying to get some of these things into the bill before it goes to the House floor,” he said. “If this passes the Senate, she is saying that she will work with us to try and achieve that.”
The current NFIP is based on aging flood maps and a lack of mitigation efforts, critics argue. Congress has previously resorted to
