SCHUMER REVEALS: UNDER-THE-RADAR FED PLAN TO ‘REFORM’ NATIONAL FLOOD INSURANCE PROGRAM COULD SOAK LI’ERS WITH INCREASED PREMIUMS & LOWER PROPERTY VALUES; PLAN WOULD USE DATA IN A WAY THAT UNFAIRLY PUTS A BULLSEYE ON LI HOMEOWNERS; SENATOR DEMANDS ADMIN IMMEDIATELY HALT PLAN & ANSWER KEY QUESTIONS, NOW
Right Now, Feds Are Quietly Piecing Together Plans To Overhaul The National Flood Insurance Program That Dictates Insurance Premiums Across LI For Tens-Of-Thousands Of Households
The Initiative, Which FEMA Calls ‘Risk Rating 2.0,’ Is Moving Along Without Feds Having Provided Congress With Answers To Key Questions About New Costs, The Private Data That Changes Would Be Based On, Impacts To LI Property Values & More; Schumer Says Reforms Are Necessary – But Not Ones That Sink LI Residents
Schumer To FEMA: Shallow Plan On Flood Insurance Would Kick Up A Storm On LI
Standing at a Long Island home, and with homeowners, U.S. Senator Charles Schumer opened the federal floodgates by revealing that a little-discussed plan to dramatically ‘reform’ the National Flood Insurance Program (NFIP) is quietly being pitched by those in FEMA’s federal office building and that it could outright soak Long Islanders with increased premiums and lower property values. Schumer explained how he wants the plan, being called ‘Risk Rating 2.0,’ halted immediately until key questions by Congress are answered.
“The irony in talking about this new federal plan for flood insurance on April Fools’ Day is that it is an outright joke for the administration to think that they can propose major reforms on how we pay for flood insurance, and how it impacts property values on Long Island, without presenting its plan and answering a litany of questions by Congress,” said U.S. Senator Charles Schumer.
Schumer presented what little detail has been released about the plan and detailed how it would likely try use data and metrics in ways that could unfairly put a bullseye on Long Island. The Senator demanded the administration immediately halt this plan, come to Congress to discuss such ‘reforms’ and answer key questions critical to Long Island homeowners and the local housing economy before it is too late.
Specifically, Schumer wants FEMA to answer at least four questions ASAP centered on costs, data gathering, affordability and how such changes would work with broader reforms:
1) How will these new rates be calculated and what is the full criteria considered as part of the calculation?
2) How does FEMA define “logical rating variables” and how many private data companies will be gathering and measuring data, and who will independently peer review such data?
3) Has the agency considered the systemic implications of insurance rates that could spike and the impact on homeowners and property values in vulnerable communities? If so, how would the agency possibly assist homeowners facing unaffordable premiums?
4) What, if anything, will FEMA do to ensure better oversight of insurance companies participating in the NFIP and guarantee that individuals are actually receiving the flood protection from the system they’ve been paying into?
Schumer explained that at present the entire new Risk Rating 2.0 plan that’s been made available is a mere 221 words and that without a halt to these backroom plans and with consultation from Congress, the new rates for all single-family homes will go into effect nationwide on October 1, 2020.
“I have long been pushing for the NFIP to be improved, but we cannot try to prop up the program on the backs of Long Islanders, who, under this plan, would likely become the bullseye of back-breaking costs,” Schumer added.
The administration’s plan would begin to assess properties individually according to what they call ‘logical rating variables.” Schumer says he hasn’t even been told all the variables that make up the logical criteria. FEMA would also take into account the replacement costs of homes, which would increase premiums for higher valued properties and decrease them for lower valued ones. This plan could potentially impact millions of single-family policyholders of public flood insurance and yet, Congress has not been consulted.
NFIP currently covers approximately 5 million policyholders nationwide. In December 2013, there were 91,558 NFIP policies in force on Long Island and following Superstorm Sandy, approximately 144,000 policyholders filed NFIP flood claims.
"As a Sandy survivor myself, I know first-hand how challenging the rebuilding process has been," said Long Beach City Council President Anthony Eramo. "We cannot allow our homeowners to be dealt another blow. We thank Senator Schumer for standing with us as we continue fighting to protect Long Beach homeowners."
"The proposed federal change in risk assessments would raise insurance premiums while potentially decreasing property values," said Long Beach City Council Vice President Chumi Diamond. "A significant increase in flood policies could make living in Long Beach unaffordable."
“It’s amazing that even as Nassau County homeowners are still struggling to figure out how they will deal with the changes to the SALT deduction another tsunami is heading towards us from Washington in the form of this ‘reform’ to flood insurance risk assessments,” said Nassau County Legislator Denise Ford. “I want to thank Senator Schumer for being a tireless advocate for Long Beach and for Nassau County taxpayers."
“Thank you to Senator Schumer for bringing this important issue to light, which would affect many homeowners in the Town of Hempstead,” said Town of Hempstead Supervisor Laura Gillen. “My administration is committed to transparency and providing important information to every homeowner so that residents can protect themselves."
Schumer has pushed for reforms as part of a long-term reauthorization of the flood program, which included: an NFIP that provides homeowners with flood protection for a stable and fair cost, more accurate flood maps that utilize the best technology and sound data, stricter controls placed on lawyers who seek to defend insurance companies against homeowners, and better oversight of insurance companies participating in the NFIP.
Schumer has long fought to protect NFIP policyholders throughout New York. In 2015, Schumer even urged FEMA to scrap the decades-old Write-Your-Own (WYO) insurance model from the NFIP and move forward to overhaul the process entirely so that flood insurance policyholders in New York and across the country benefited from consistent coverage and providers that were not incentivized to fight their claims. 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 NFIP’s rules and regulations, 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.