U.S. Sens. Cory Booker of New Jersey and Bill Cassidy of Louisiana are requesting input on the National Flood Insurance Program (NFIP) in advance of their work on a bipartisan bill to revise and reform the NFIP.
The bipartisan measure looks to lower flood insurance costs, provide new affordability measures for low- and middle-income families, expand access to uninterrupted flood insurance coverage, and make other improvements to the NFIP such as encouraging investments in pre-disaster mitigation to make communities more resilient in the face of flooding and extreme weather.
“By working to address rising flood insurance premiums and making critical reforms to the National Flood Insurance Program (NFIP), we will ensure more New Jersey families and businesses have better access to affordable and reliable insurance to protect themselves from the damaging and costly impacts of extreme weather and flooding,” said Sen. Booker. “This is an urgent pocketbook issue for many in our state, and as Republicans and Democrats come together to work on this important legislation, I encourage New Jerseyans to provide us with their input. Guided by the experiences and priorities of New Jerseyans, I look forward to working in a bipartisan manner on commonsense improvements to the NFIP that will lower costs and better protect our communities.”
Sens. Booker and Cassidy have released a letter to interested parties which includes additional information about the NFIP, the type of input being solicited, and the proposed reforms to the NFIP. Through September 15, individuals may use this web page to learn more about the NFIP and the type of input being solicited, and use a web form to provide feedback.
As part of the reauthorization of the NFIP for the next five years, some of the proposals being presented to lower costs and improve access include:
- A cap on yearly premium increases.
- Establishing a new affordability program within the NFIP that will provide direct assistance to families most in need.
- The option for individuals to pay in monthly installments, making it easier to manage premium costs.
- Increasing coverage limits for structural damage to ensure families are better protected after a storm.
- Expanding investments in pre-disaster mitigation efforts that will better protect communities from future flooding while also providing a significant return on investment through reduced flood losses.
- Addressing the long-term solvency of the NFIP while also implementing reforms to increase the transparency of insurance costs, claims, and coverage.
The NFIP is authorized by the National Flood Insurance Act of 1968, and serves as the primary source of flood insurance coverage for residential properties in the U.S. The NFIP has more than 4.7 million flood insurance policies providing more than $1.3 trillion in coverage, with 22,000-plus communities in 56 states and jurisdictions participating.
The NFIP has two main policy goals: provide access to primary flood insurance, thereby allowing for the transfer of some of the financial risk from property owners to the federal government; and to mitigate and reduce the nation’s comprehensive flood risk through the development and implementation of floodplain management standards. A longer-term objective of the NFIP is to reduce federal expenditure on disaster assistance after floods.
The Federal Emergency Management Agency (FEMA) introduced a new pricing methodology in April 2022, known as Risk Rating 2.0, which represents the biggest change to the way the NFIP calculates premiums since the program began. Under the change, premiums for individual properties are based on their actual flood risk rather than flood zones.
