Current NFIP is underwater with debt, overhaul would address that problem, be more responsive to homeowners, and cap the cost of annual increases
Credit: Faith Liguori
John Reitmeyer reports for NJ Spotlight:
With a hard deadline for reauthorizing the National Flood Insurance Program now a little more than two months away, federal lawmakers from New Jersey are backing a bipartisan proposal that would both renew the program and overhaul it in a way that incorporates lessons learned from Superstorm Sandy.
The flood-insurance program, or NFIP, underwrites policies for thousands of New Jersey homeowners who live in coastal zones or other flood-prone areas, but it was roundly criticized by New Jersey storm victims in the wake of Sandy, for what they said were questionable denials of claims and delayed payments.
The program is also deep in debt, partly because of the flood of claims filed in the wake of Sandy, making it a major fiscal headache for Congress.
Affordable and responsive
A reauthorization bill that seeks to make the NFIP both more affordable and more responsive to homeowners was formally introduced in the House of Representatives earlier this week by U.S. Reps. Bill Pascrell (D-9th) and Frank Pallone (D-6th). Their legislation mirrors a bipartisan bill in the Senate that was unveiled last month by U.S. Sens. Robert Menendez (D-NJ) and John Kennedy (R-LA). Time is also of the essence for the reauthorization effort since the NFIP is facing a September 30, 2017 expiration date.
The changes proposed in the six-year reauthorization bill include capping annual premium increases to homeowners; freezing interest payments that the program owes the federal government for funds that have been borrowed to pay out claims; and limiting profits that private-sector insurance companies can make while underwriting program policies.
The proposed reauthorization also seeks to give the flood-insurance program a more preventive approach by offering incentives like low-interest loans for homeowner flood-mitigation projects. It would also encourage the use of more modern flood-mapping technologies.
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