Flood Insurance Cost of Compliance Funding Deadline Pushed to 2021

Lobby Victory for New Jersey Organizing Project
Apr 18, 2018

The New Jersey Organizing Project, based on Cedar Bonnet Island but covering the New Jersey coast from Cape May to Middletown, announced a victory last week with the news that the Federal Emergency Management Agency has extended the deadline for Increased Cost of Compliance funding, which is coverage built into the National Flood Insurance Program and pays out up to $30,000 to “substantially damaged” homeowners for house raising, repairs and renovations and property fortification, mostly due to Superstorm Sandy. FEMA had been planning to cut off access to that program if people didn’t complete their projects by October of this year.

“When we work together for our communities, we get results,” NJOP leaders declared. They had recently returned from Washington, D.C., where they presented a petition with roughly 1,000 signatures to FEMA Administrator William “Brock” Long. To those who signed and took action, they said with thanks, “That means a lot for families still working to get home from Sandy.”

The ICC topic had come up in January during one of NJOP’s periodic campaign calls that bring people together from across the region, NJOP Director Amanda Devecka-Rinear explained. “Everyone was like, ‘that’s crazy,’” given so many families, due to factors outside their control, are still just getting started rebuilding.

So the “Sandy Shorekeeper” team, which focuses on Sandy recovery and resiliency, started to mobilize. A delegation led by Sens. Bob Menedez and Cory Booker sent a letter to Long, dated March 26. Menendez is chairman of the Sandy Task Force and a senior member of the Senate Banking Committee, which oversees the National Flood Insurance Program.

Now families will be able to access their ICC funding until November 2021 to make their properties more resilient.

“This is great news for survivors of Sandy who are trying to make their homes more resilient and less vulnerable to future storms,” Menendez said. “I’ve heard from many constituents who want to elevate and fortify their homes but were mired in a financial limbo by running up against an arbitrary deadline that could cost them federal funding they already paid for in their flood insurance policies. Homeowners fund the ICC program through premiums, so they deserve full access to these resources.

“I’m pleased FEMA heeded my call to extend the deadline and give New Jerseyans some breathing room and the peace of mind that they won’t lose out on up to $30,000 if their mitigation project is delayed for reasons beyond their control.”

ICC coverage also helps homeowners save on their flood insurance premiums while also increasing property values, which in turn helps boost the local economy.

Last year, Menendez introduced comprehensive, bipartisan legislation to extend the NFIP for six years while instituting a series of sweeping reforms to address the waste, abuse and mismanagement plaguing the system that led to delayed recovery for Sandy survivors.

The bill, which was cosponsored by Booker and later introduced by Rep. Frank Pallone Jr. (D-N.J.-6th) in the House, includes provisions that would increase the maximum limit for ICC coverage to better reflect the costs of mitigation projects, and expand the program’s eligibility in order to encourage more proactive mitigation before natural disasters strike.

In his recent letter to FEMA, Menendez and the state’s congressional delegation argued that Sandy survivors had been through “almost unimaginable trials and tribulations over the past five and a half years, from chronic underpayment of flood insurance proceeds to a broken state-run rebuilding program; and they should not be cut off from receiving this badly needed assistance due to an arbitrary deadline.”

In a letter back to Menendez, Assistant Administrator for Federal Insurance David I. Maurstad wrote: “To provide these policyholders with a reasonable opportunity to complete their ICC claims, I am extending the deadline for completing ICC claims from Superstorm Sandy by an additional three years. Policyholders affected by Superstorm Sandy may now complete their ICC claims no later than the nine-year period following the date of loss.

“This extension also includes ICC claim assignments to communities for the non-federal cost-share match in conjunction with a FEMA-funded mitigation grant project related to Sandy.”

Looking ahead, Devecka-Rinear said the work to be done includes fighting for an NFIP that prioritizes the safety and welfare of families and communities; future storm preparation and mitigation; affordability, accurate flood zone mapping; and disaster recovery programs.

Congress reauthorizes the National Flood Insurance Program. Effective reform, she said, would make that funding available before a storm to put the necessary protections in plans. Studies have shown every dollar spent on mitigation saves $4 on the other end, in post-storm repairing, rebuilding, etc., according to Devecka-Rinear.

“This is a fight we’re gearing up for in July,” she said, the underlying questions being do we have an NFIP that helps policyholders to prepare for and mitigate risks and also bails them out? Or does it only protect private insurance companies?

According to Devecka-Rinear’s reseach, in February a new study (published at Yale) suggests that FEMA is underestimating flood risk throughout the U.S. “FEMA’s current estimates are that 13 million Americans live in a 100-year flood zone. Study authors put that number closer to 41 million, more than three times FEMA’s estimate, and the study didn’t account for climate change and impacts,” she said.

“These storms also have devastating impacts on communities and the health and economic well-being of families who live through them. According to a report published by the New Jersey Resource Project in October 2017 on the fifth anniversary of Superstorm Sandy, 70 percent of survey participants developed new or worsening physical or mental health conditions, including 19 percent of people who described an increased dependence on alcohol, tobacco or drugs. In addition, 56 percent of respondents had trouble paying bills and/or affording food and gas since the storm, in addition to those who had struggled before the storm.

“Because the impacts of climate change will only increase, thereby increasing the challenges for families, we are working together to ensure that federal disaster-related programs like the National Flood Insurance Program and HUD Community Development Block Grants have the greatest positive impact on frontline communities.”

Booker agreed mitigation of future risk is imperative. Five-plus years after Sandy, he said, “Many families are still trying to make their lives whole again. In order to make our communities stronger and more resilient in the face of future storms, we must make the necessary investment in critical mitigation projects today.”

— Victoria Ford


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