At an event today in the Monmouth County borough of Sea Bright, Senator Bob Menendez and Rep. Frank Pallone (D-Long Branch) called on Congress to pass their bipartisan National Flood Insurance Program Reauthorization Act of 2023, which would reauthorize the program for five years and make a number of other reforms.
“Our National Flood Insurance Reauthorization bill implements the lessons that we learned after Superstorm Sandy,” Menendez said. “It makes sweeping reforms to make the programs more sustainable, affordable, fair, and efficient.”
The National Flood Insurance Program was first created in 1968 with the dual intentions of giving high-risk homeowners the ability to insure themselves against devastating floods while also reducing future development in high-risk areas. It became particularly relevant in New Jersey starting in 2012, when Hurricane Sandy devastated the Jersey Shore and other parts of the state.
In Sandy’s immediate aftermath, Congress passed a massive relief bill substantially increasing the National Flood Insurance Program’s funding. But since then, Menendez and Pallone said today, it’s become clear that other reforms are needed to keep the program viable for New Jersey homeowners.
The biggest issue that the two legislators cited is Risk Rating 2.0, a system used to individually assess homes’ risk levels and charge premiums based on the rating. Pallone said that because the rating system increased some homeowners’ premiums so dramatically, it’s causing a reduction in overall coverage.
“About 100,000 people dropped the flood insurance program in the last year once Risk 2.0 went into effect, because of the increased premiums,” Pallone said. “And we estimate at least that many each year, if we don’t do something to change it, will drop the insurance [going forward].”
The bill Menendez and Pallone introduced in Congress last month now would cap annual premium increases at 9%, create a new voucher program for lower-income homeowners and renters, and work to make the claims process more efficient, among other things.
13 of New Jersey’s 14 federal representatives are already either sponsoring or co-sponsoring the bill, including 11 Democrats and two Republicans. The lone holdout for now is Rep. Chris Smith (R-Manchester), a Republican who represents a large portion of the Jersey Shore.
Notably, the bill’s list of cosponsors also includes several conservative Republicans from states like Mississippi and Louisiana, indicating that the upcoming efforts to get it passed may transcend standard ideological divides.
“In the face of climate change, we refuse to abandon the communities who live on its front lines,” Menendez said today. “I continue to encourage all of my colleagues in Congress to join us in this fight. Let’s reauthorize the National Flood Insurance Program and help it shine as the lifeline that it has been for more than half a century.”