U.S. Senator Charles Schumer (D-N.Y.) is seeking an extension of the National Flood Insurance Program (NFIP) with changes stemming from lessons learned in the aftermath of Superstorm Sandy — including placing “stricter controls” on lawyers defending insurance companies against homeowners and “better oversight of insurance companies participating in the NFIP.”
Senator Schumer, addressing a crowd on Long Island, said, “My message to Congress today is a simple one: it takes just one storm without proper insurance and protection to devastate a coastal community. It is frightening that — just as hurricane season brews in the Atlantic — a crosswind of partisan politics in Congress is putting Long Island and the nation at risk of potentially letting the National Flood Insurance Program expire. Flood insurance should not be political, but right now there are those who would have no issue with letting the NFIP lapse. We are here today to say this simply cannot happen. We cannot and must not allow the National Flood Insurance Program to expire.”
|'Cannot be allowed to lapse'
Senator Schumer added, “While the NFIP is certainly in need of improvements — from protecting homeowners from outrageous premium increases and storm victims from fraud and abuse — the program cannot be allowed to lapse, because then tens of thousands of New Yorkers and millions of Americans would be in jeopardy. Long Island depends upon the NFIP; it's critical that it's up and running if, God forbid, another hurricane were to head for us. That is why I am announcing an all-out push to extend this program ahead of the July 31st deadline and will work across the aisle to get it done.”
Senator Schumer explained that the extension was being overseen by the Senate Banking Committee led by Republican Michael Crapo and Democrat Sherrod Brown. Senator Schumer said that he will play a role in these negotiations and has pledged an all-out effort to try and extend the program amidst what is expected to be an active 2018 hurricane season beginning on June 1.
“Think for a moment the situation Texas homeowners would be in today if last year's dreaded Harvey hit while the NFIP was expired,” said Senator Schumer. “It would have made the multi-billion dollar catastrophe an even more tragic and horrifying situation for tens of thousands of people. We can't risk that kind of situation on Long Island.”
|Reforms wanted for long-term reauthorization
Senator Schumer detailed the reforms he is pushing to make as part of a long-term reauthorization, which include:
- “Stricter controls placed on lawyers” who defend insurance companies against homeowners;
- “Better oversight of insurance companies participating” in the NFIP;
- An NFIP that provides homeowners with flood protection for a stable and fair cost; and
- More accurate flood maps that utilize the best technology and sound data.
The NFIP covers approximately five million policyholders nationwide. In December 2013, there were 91,558 NFIP policies in force on Long Island alone and following Superstorm Sandy, approximately 144,000 policyholders filed NFIP flood claims.
According to a Pew analysis, there are approximately 435,000 NFIP policyholders in shoreline communities of Texas. Senator Schumer said that many of these policyholders have filed flood claims related to Hurricane Harvey and the other hurricanes that struck last summer.
The last extension of the NFIP was agreed to in the recently-passed bipartisan spending bill. With the NFIP's expiration again approaching, Senator Schumer said that Congress should not use the threat of an impending hurricane season as a political tool and must work to quickly pass a reauthorization before the program lapses this July.
|Uncertainty during hurricane season
Senator Schumer said that if Congress failed to act, a lapse in the NFIP would mean uncertainty ranging from individuals not being able to purchase a new home because that home required flood protection to homeowners at risk of drastic flood damage not being able to renew their flood coverage, and many more questions as to how the program would function during the middle of hurricane season.
In 2015, Senator Schumer urged the Federal Emergency Management Agency (FEMA) to scrap the decades-old write-your-own (WYO) insurance model from the NFIP and move forward to overhaul the process entirely. The WYO model has been in place since 1983, and allows participating insurance companies to write and service policies in their own names.
While the WYOs are subject to the NFIP's rules and regulations, Senator Schumer explained that often times the companies are servicing flood insurance claims “with the same profit-driven mentality” as they would have for their other lines of business, and as a result unfairly reducing payments to homeowners.
Senator Schumer said that although the NFIP was not perfect and certainly in need of improvements, it nevertheless must be extended. Allowing the program to lapse amidst hurricane season would be irresponsible and could wind up costing Long Island homeowners and businesses dearly, he said.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].
