Home Insurance Will Congress finally fix federal flood insurance program so important to N.J.? – NJ.com

Will Congress finally fix federal flood insurance program so important to N.J.? – NJ.com

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WASHINGTON — After more than a year of kicking the can downfield, Congress may finally be ready to extend and overhaul the federal flood insurance program so important to New Jersey.

At a hearing Wednesday, the new House Financial Services Committee chairwoman, Rep. Maxine Waters, D-Calif., backed changes to the program championed by U.S. Sen. Robert Menendez, D-N.J.

The plan includes steps to hold down premiums, invest in construction projects designed to reduce the impact of the next storm, forgive a $20 billion debt that ballooned after Hurricane Katrina and then after Sandy, and develop new maps that accurately identify areas in danger of flooding.

Federal flood insurance is one of the few federal programs that benefits New Jersey more than other states. FEMA has paid $6 billion to property owners in the state from Jan. 1, 1978, through Sept. 30, 2018, behind only Louisiana and Texas, agency statistics show.

About 227,000 New Jerseyans have federal flood insurance. The Garden State bore the brunt of Hurricane Sandy.

Menendez said he would work with Waters on legislation, unlike in the last Congress where he found no support among most House Republicans for his measure.

His plan would have held down increases in flood insurance premiums, allocated funds to protect properties against water damage rather than just paying claims, and changed procedures in response to problems that surfaced when Hurricane Sandy homeowners sought to be compensated for damages.

“Many of the elements are in there,” Menendez said in an interview. “We’re going to look and work with them closely. We are building a coalition here to do more than just get a short term reauthorization plan.”

The current flood insurance program expired Sept. 30, 2017, and Congress has passed several short-term extensions since. The National Flood Insurance Program now will expire May 31.

“This haphazard approach to legislating puts communities at risk and undermines the health of our housing market,” said Waters, who proposed extending the program to Sept. 30, 2024.

More than three-quarters of Americans, 76 percent, said Congress should make fixing the flood insurance system a high or medium priority, according to a Pew Charitable Trusts poll. Another 22 percent said it should be a low priority.

“They cannot continue to live in uncertainty when it comes to flood insurance,” said Rep. Josh Gottheimer, D-5th Dist., a member of the Financial Services Committee. “They need common-sense reforms, and we need to deliver them through a long-term reauthorization that provides responsible governance and doesn’t leave policyholders drowning in premiums.”

The program was found wanting after Hurricane Sandy, where the private insurers working for the Federal Emergency Management Agency shortchanged homeowners and tried to blame storm damage on other factors. Largely at Menendez’s behest, FEMA agreed to reopen claims and eventually paid out $350 million more to Sandy homeowners.

“I heard from constituents that had full coverage because they paid into the NFIP every year, but in the end were denied what they were owed,” said Rep. Bill Pascrell Jr., D-9th Dist., a House sponsor of Menendez’s bill, which also would crack down on insurers that fail to policyholders what they were owed..

House Republicans, though, passed legislation in November 2017 that would let those same private insurers compete with the government for business writing flood policies. Their bill took no steps to address the claims abuses that surfaced after Sandy.

Rep. Frank Pallone Jr., chairman of the House Energy and Commerce Committee, said climate change is making the problems worse, increasing the severity of storms and resulting floods.

Jonathan D. Salant may be reached at jsalant@njadvancemedia.com. Follow him on Twitter @JDSalant or on Facebook. Find NJ.com Politics on Facebook.

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