David Hammer’s exclusive investigation of the National Flood Insurance Program was the basis of questions at a D.C. hearing today by U.S. Sen. John Neely Kennedy and Senator Menendez grilling FEMA’s NFIP chief.
Watch Video: Senate Hearing on FEMA / NFIP Reform and Reauthorization
Senator Menendez blasts NFIP head Roy Wright with the following comments;
Superstorm Sandy was a natural disaster but the Flood Insurance Claims process, chronic underpayments, delays, “gotcha” clauses, arbitrary rules, inflexible deadlines, run around, appeals process which is fundamentally broken is….. the “Man Made Disaster”.
FEMA’s Private Counsel, Nielsen Law Firm, did everything in it’s power to drag out proceedings, draining time resources and time from Sandy Survivors who had little to spare of each. Rather than work in the interest of Justice, the Nielsen Law Firm filed countless frivolous lawsuits and motions, seeking to run up their legal bills. Which Nielsen himself bragged would “surpass $100 million dollars”. To add insult to injury these millions of dollars came from Flood Policy holder premiums. He dealt with Sandy Survivors like they were perpetrators. Enriching himself at their expense. Bullying, scaring people out of court and hiding documents. When they finally got to court Nielsen was excoriated by a federal judge, “for a shocking effort to curtail inquiry and a level of admonishment rarely seen in federal legislation. The judge said ” I find the Counsel for Wright (Flood Insurance Company) violated its obligation to comply with the courts discovery orders, unreasonably prolonging the litigation, imposing unnecessary costs on plaintiffs – causing more unwarranted delays.
NOT A MORSEL OF REGRET BY THAT LAW FIRM !
FEMA’s private counsel, Nielsen Law Firm, which was wholly responsible for underpaying the claims is still working for the NFIP and FEMA. WHY?
Why are the WYO’s allowed to “pocket” $.43 of every premium dollar and they shoulder no risk?
FYI, Senator Kennedy, from Louisiana, was also questioning why the “Nielsen Law Firm” is still involved with the NFIP.
WE URGE ALL OUR MEMBERS NATIONALLY TO CALL THEIR SENATORS AND CONGRESSMEN AND ASK THEM THESE SAME QUESTIONS.
U.S. Senator Bob Menendez (D-N.J.), chair of the Sandy Task Force and a senior member of the Senate Committee on Banking, Housing and Urban Affairs, today laid out a series of robust reforms to the much-maligned National Flood Insurance Program (NFIP) administered by the Federal Emergency Management Agency (FEMA) that experienced widespread failures and fraud, cheating storm victims and hampering recovery in the aftermath of Superstorm Sandy. Sen. Menendez aims to make the NFIP: simple, affordable, fair, efficient and accountable to consumers and taxpayers.
“Americans deserve a program that is sustainable for taxpayers, affordable for homeowners, and accountable to everyone,” Sen. Menendez said. “If we want a more sustainable system, the answer isn’t to slam homeowners with even higher rates. The answer is to go after the waste and abuse that’s rampant throughout FEMA. The National Flood Insurance Program is full of perverse incentives that drive up costs for taxpayers and that hurt homeowners. The principles I’ve outlined would require insurance companies to start spending more of the premium dollars they receive on the customers they are paid to serve.”
Congress is beginning to debate reauthorization of the NFIP, which is set to expire on Sept. 30, 2017. The first hearing before the Senate Banking Committee is scheduled for tomorrow.
Sen. Menendez’s prescription for NFIP reform will address the following:
Build on the success of the Homeowner Flood Insurance Affordability Act (HFIAA) by going further to make rates more affordable, particularly for low and middle income families
Repeal arbitrary surcharges on homeowners, both primary and non-primary, and businesses
Bring common sense to the “earth movement” exception in order to simplify things for homeowners and ensure they get the resources they need to rebuild
Redefine basement exemption so homeowners can better understand what is and what is not covered in event of a flood
Return NFIP to solvency by eliminating or transferring its debt to the general fund, and by halting $400 million in annual interest payments to Treasury
Extend the 60-day deadline to appeal a claim to FEMA
Enforce the 90-day deadline for FEMA to adjudicate an appeal, and award the appellate the full amount of their appeal if FEMA does not comply with the deadline
Require all appeals to be heard by an independent, objective, neutral arbitrator outside of FEMA
Eliminate wasteful spending on outside attorneys fees fighting legal challenges filed by homeowners
Require the Write-Your-Own (WYO) insurer to pay attorney fees and other penalties to the policyholder when it’s determined they engaged in bad faith in underpaying claims
Extend the current one-year statute of limitations for homeowners to legally challenge their flood insurance claim, acknowledging both the difficulties in finding pertinent documents following a disaster and delays in responses by FEMA
Limit profits for WYOs and align their compensation more with performance, saving money and delivering better service for policyholders
Level the playing field and eliminate the incentive to lowball claims by imposing penalties for both under- and overpayment
Increase transparency by developing a “Policyholder Right to Know” and require specific signoff from the homeowner on any uncovered items that they might reasonably have expected would be part of flood insurance
Establish the right of policyholders to see all documentation and evidence that was used to process their claim
Mandate strong standards for training and continuing education to ensure all agents and adjusters perform satisfactorily
Create a national Storm Protection Fund (SPF), a robust, centralized, resiliency infrastructure fund to make critical mitigation investments to substantially reduce the cost of rebuilding after a disaster
Increase and expand the Increase Cost of Compliance (ICC) program, which provides up to $30,000 for a homeowner to mitigate their home from future flood damage only after it suffers substantial loss (more than 50% of the value), by extending its eligible purposes and providing pre-disaster options to mitigate damage
Sen. Menendez outlined his principles for NFIP reform at a news conference in Little Ferry, one of several communities severely impacted by Superstorm Sandy in 2012. He was joined by Congressman Bill Pascrell, Jr. (N.J.-09); Mayor Mauro Raguseo; George Kasimos of Stop FEMA Now; Susan Marticek of the Ocean County Long-term Recovery Group; Amanda Devecka-Rinear of the New Jersey Organizing Project; and New Jersey homeowners and storm victims.
There is a proposal in Congress trying to have NFIP Flood Policy Holders across the country pay a surcharge to help loosen up federal funds to pay for President Donald Trump’s proposed border wall with Mexico, according to budget documents detailed in reports by The Washington Post and Politico.
There are a few problems with this proposal;
The NFIP is already drowning in 25 Billion Dollars in Debt (due primarily because of NFIP mismanagement)
Flood Insurance premiums are already unaffordable and will continue to skyrocket, adding a “surcharge” will force many more to lose their homes.
What valid reason would NFIP flood policy holders be singled out to bear a larger burden of the cost of the wall.
Taxing a particular segment of the population would be unfair. Everyone across the country would equally need to bear the cost.
Senator Menendez correctly stated “It is outrageous to rifle through the pockets of Sandy survivors/ NFIP Flood policyholders, who can barely afford to stay in their own homes to pay for a wall along the Mexican border,”
With certainty we can state that 99% of StopFemaNow members and virtually all Flood Policy holders across the country are against this “surcharge”.
The Asbury Park Press conducted a survey of all New Jerseyans, and the question was;
Do you approve of a surcharge on flood insurance policies to help pay for the border wall with Mexico?
91% voted against the surchage!
CLICK ON THE LINK TO READ THE FULL STORY BELOW AND VOTE !
Last month, the Federal Emergency Management Agency proposed raising the base flood elevation from Flamingo Street to Buccaneer Drive from VE, meaning the area has a high risk for flooding, to VA, which is a slightly lower risk.
But this could be a costly change for homes and businesses built after 1984, as structures not built at a certain height will pay extra.
If newer, it must be rated with an elevation certificate and thats where it could get ugly, said Richard Karger, president of Fort Myers Beach Insurance Brokerage.
Jacki Liszak, owner of the Sea Gypsy Inn, says she went from paying around $3,000 to $47,000 for flood insurance because of the FEMA flood map change.
My flood insurance rate adjusted for over 2,000 percent, she said. Your rate will increase, so you need to stay involved and in touch with the group thats leading the charge in this area because being taken by surprise is real awful position to be in its really terrible.