Menendez, Booker Pleased with FEMA Action on Flood Insurance Advocate

Press Release

U.S. Senators Robert Menendez and Cory Booker, who have called for a series of actions by FEMA to increase transparency, fairness and credibility within the National Flood Insurance Program, said today they were pleased the agency will implement a key piece of legislation Menendez authored and open an Interim Flood Insurance Advocate office on December 22. This latest announcement comes on the heels of three other major reforms the Senators have secured from FEMA to help level the playing field for policyholders.

"I wrote the bill creating a flood advocate so that homeowners would have an independent ally in their corners to help navigate the complex and often overwhelming process of filing a claim or appealing an unfair decision," said Sen. Menendez. "I'm pleased Administrator Fugate has followed through on the promises he made to get this office up and running. I look forward to meeting the interim advocate and will be closely monitoring the office to ensure it takes a proactive approach to level the playing field and ensure disaster victims get a fair shake."

"I am pleased to see that FEMA is taking action on the recommendations Senator Menendez and I have been voicing," said Sen. Booker. "The measures we have announced, along with the federal dollars that continue to come to municipalities and residents in New Jersey, are critical to making our state stronger and more resilient. I know there is work left to do, and I will continue to fight for New Jerseyans and all of the resources needed to make a complete recovery from Sandy."

The office of Flood Insurance Advocate was authorized in the Homeowner Flood Insurance Affordability Act, which Senator Menendez authored and spearheaded through Congress and into law in March of this year. The office was created in response to countless constituents contacting the Senators offices seeking help navigate the complex claims and appeals process for the National Flood Insurance Program in the aftermath of Sandy. Menendez specifically called for this office to have a high degree of independence and report directly to the Administrator of FEMA, so it can be a strong watchdog for policyholders.

FEMA's creation of a flood insurance advocate office and naming an interim director comes in response to months of calls from Senator Menendez and Senator Booker for specific reforms in the NFIP claims process and four months after Menendez first brought forth evidence of potentially widespread problems with the program.

The Senators had outlined the main problems with the NFIP claims process and four major actions FEMA has committed to take:

1) Unbalanced Penalty Structure

Problem: Unbalanced penalty structure that penalizes Write Your Own (WYO) insurance companies for making overpayments disproportionately more than underpayments, leading to systemic underpayments.

FEMA's Action: Administrator Fugate has committed to take administrative action to level the penalties levied against WYOs for underpayments and overpayments. He has asked Sen. Menendez to convene a task force composed of Congress, FEMA and WYOs to find the right balance while ensuring over-and-underpayments are penalized equally. The first meeting of this Task Force will convene within weeks.

2) Secret Altering of Engineering Reports

Problem: WYOs "shopping" for engineering reports in order to reduce the amount of damage reimbursable by flood insurance and refusing to comply with the New York Federal Court order to provide policyholders with contradicting damage assessments.

FEMA's Actions: Today, Administrator Fugate sent a letter to all WYOs operating in New Jersey and participating in the NFIP, ordering them to comply with the N.Y. Magistrate Court order and provide policyholders with all engineering report iterations, including but not limited to revisions.

3) Appeals Deadline Hypocrisy

Problem: Hypocrisy by FEMA to dismiss 270 claims because the policyholder missed a deadline, yet FEMA failed to comply with its own deadlines to respond to appeals.

FEMA's Actions: Administrator Fugate has committed to reopen and consider the appeal of 270 policyholders who suffered damage from Sandy and had their appeal dismissed because they missed a FEMA deadline.

4) Robust Flood Insurance Advocate

Problem: The need for a comprehensive, flood insurance advocate that will assist policyholders with the claims process, not limited to maps.

FEMA's Actions: Administrator Fugate once again renewed his commitment to ensure that the flood insurance advocate authorized by the Homeowners Flood Insurance Affordability Act (HFIAA) would be robust and comprehensive, helping policyholders navigate through the claims and appeals process in addition to map revisions.

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