Reps. Maloney, Velazquez Sound Alarm About Drastically Increasing Flood Insurance Premiums Facing New Yorkers, Many of Whom are Superstorm Sandy Victims

Press Release

Congresswoman Carolyn Maloney (NY-12) was joined by Congresswoman Nydia Velázquez (NY-7), New York City property owners, co-op residents, insurance experts, small-business owners and community advocates today outside 200 East End Avenue, an Upper East Side co-op building that, after recouping from $4 million of damage after Hurricane Sandy, could be hit with sky-high flood insurance premiums through the National Flood Insurance Program, as a result of the the Flood Insurance Reform Act of 2012. Other attendees from around New York City are also facing the reality of soaring flood insurance premiums that are unaffordable and could prevent people from purchasing insurance. Congresswoman Maloney called for a delay in the rate increases, many of which took effect on Oct. 1, and could raise New Yorker's premiums by $5,000-$10,000, according to a recent City report.

"It is important that we make sure that federal flood insurance is available to New Yorkers and all Americans, but the rate increases prompted by the Flood Insurance Reform Act are absolutely unacceptable. These rates will prevent people from obtaining flood insurance, will force people out of their homes and businesses and decrease property values. We need to make sure that we have a strong National Flood Insurance Program, but we cannot do that on the backs of hardworking New Yorkers and Americans. We need to delay these rate increases and draft strong, bi-partisan legislation that will mitigate the harmful effects of these rate increases," said Congresswoman Maloney.

"The flood insurance program should not harm New Yorkers with unreasonable rate increases. We must work together to find a solution that protects New Yorkers in high-risk flood areas," said Congresswoman Velázquez.

According to a recent study commissioned by the City of New York, New Yorkers could see their premiums jump from between $5,000 and $10,000, from $430, as a result of the Flood Insurance Reform Act, and the new risk classifications of the forthcoming FEMA maps.

This has New Yorkers, from the Upper East Side, to Red Hook, Brooklyn, to the Rockaways extremely concerned, and many of the attendees expressed this at today's press conference:

"The building's Board and its Managing Agent have been taking great steps to ameliorate the effects of any future storm and working with professionals, including engineers, to prevent or lessen the effects of a similar occurrence, but we also need to be sure that we can continue to obtain adequate flood insurance at reasonable rates. Our building is not situated on the banks of a river or ocean. In fact, it is more than 50 to 60 yards removed from the nearest point of the East River," said Lance Meyers, a resident of 200 East End and a member of its board.

"From an Insurance cost-perspective it seems we are facing increases in the range of anywhere from 100% to 400% or more for the same or similar coverage that is available through the National Flood Insurance Program (NFIP)," said Eric McPhee, Executive Vice President, Director of Risk Management at Orsid Realty Corp., which purchases insurance for the 200 East End Avenue co-op, and is concerned about the building's future insurance costs.

"Biggert-Waters tries to balance the flawed design of the National Flood Insurance Programs on the backs of innocent, hardworking homeowners in neighborhoods such as ours. This is an outrage, especially because so many good alternatives exist. Biggert-Waters needs immediate and dramatic reform along with an affordability study. We support adopting a risk-based premium structure for the National Flood Insurance Program that needs to be done in a way that is affordable and encourages homeowners along with the government to take common-sense measures to protect against flooding and other climate impacts," said the Red Hook Flood Mitigation Group, which is concerned that many property owners in its neighborhood will not be able to afford flood insurance.

"This is going to have a devastating impact on the community. The rate increases are going to be so unaffordable and, eventually, if people want to leave their homes, they're going to be unable to sell their homes," said Dan Mundy, Sr. of Queens Community Board 14 and the Jamaica Bay Eco-Watchers, and lives in Rockaway, which was hit hard by Hurricane Sandy.

"In the wake of Hurricane Sandy, many homeowners are still rebuilding and recovering throughout the City," said Steven Spinola, president of the Real Estate Board of New York. "The substantial increases in flood insurance premiums allowed under the Biggert-Waters Flood Insurance Reform Act amendments may be devastating for those who are struggling to put their lives and homes back together. The Real Estate Board of New York lauds Congresswoman Maloney and her staff for their leadership and proactivity in addressing this crucial issue."

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