Flood Insurance Changes Could Increase Rates For LI, Schumer Says

Sen. Charles Schumer held a press conference on Monday to point out changes in the National Flood Insurance program that he said could lead to higher insurance premiums and lower property values for Long Islanders.

The change to the NFIP, which is managed through FEMA, relates to reassessing how the program determines flood risk and insurance premiums. The change, which is planned to go into effect on Oct. 1, 2020, hasn't been publicized, Schumer said, but could have a big impact on many people.

“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,” Schumer said.

FEMA published information on the changes to NFIP, but it is threadbare. Just 241 words long, the updated plan will "...include determining a customer’s flood risk by incorporating multiple, logical rating variables – like different types of flood, the distance a building is from the coast or another water source, or the cost to rebuild a home."

"The new rating plan will also aim to ensure customers will no longer face dramatic rate increases during map changes or at the edge of flood zones," the plan reads. "By reflecting the cost to rebuild, the new rating plan will also aim to deliver more equitable rates for owners of lower-value homes. By leveraging industry best practices and technology, FEMA plans to reduce the complexity of buying flood insurance, so that it is as straight-forward as homeowner’s and auto insurance for both agents and applicants."

However, Schumer points out that the brief summary posted on the FEMA website is all the information that's available about the program. FEMA said it will share more information in the coming months "as information becomes available."

Schumer said he hasn’t been told all the variables that make up the criteria that FEMA would use to set new rates. 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, Schumer said, but Congress has not been consulted.

“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 said.

In December 2013, there were 91,558 NFIP policies in force on Long Island and following Hurricane Sandy, approximately 144,000 policyholders filed NFIP flood claims.