It’s about giving homeowners affected by floods a choice, Assemblyman Phil Goldfeder said in describing legislation he proposed to create a new flood insurance agency for New Yorkers.
The New York Flood Insurance Association [NYFIA] would provide homeowners with an alternative to FEMA’s flood insurance, with premiums that are currently on the rise, by offering economical, fair and non-discriminatory policies, said Goldfeder at a press conference on Sunday. It would also “protect families from the unfair flood damage claims practices experienced following Superstorm Sandy.”
“Our families were victimized by Sandy and then again by the insurance companies and NFIP who were supposed to help,” said Goldfeder. “Insurers have fought Sandy claims and challenged homeowners’ needs, adding insult to injury for those who went through so much and who still struggle to recover.”
The proposed law is aimed at giving homeowners a choice between insurance policies they could pick if another flooding catastrophe happens. Any homeowner or renter who has made a reasonable effort to find coverage on the private market could be eligible to apply to NYFIA for coverage of up to $1.5 million for property and contents.
Included in the proposed legislation are provisions to keep costs low for both policyholders and insurance providers, according to Goldfeder.
This would be done by capping policies at certain percentages of private market policy rates, based on the property of the homeowner. NYFIA would also have the power to distribute any premium gains and losses in excess of 1 percent evenly among members.
Goldfeder said this is in sharp contrast to the federal government’s National Flood Insurance Program, which after 1986 was stripped of its ability to save and reinvest premium revenues.
State-approved insurers would work for the new association, which would be governed by the superintendent of the State Department of Financial Services and a board of 13 directors.
Association members would have to follow a plan of operation requiring them to provide “economical, fair and non-discriminatory” flood coverage to policyholders and follow “reasonable and objective” underwriting standards, said Goldfeder.
Goldfeder expressed his anger at the National Flood Insurance Program and said that it had failed his constituents. He believes this new system would give homeowners more peace of mind if they ever had to face another storm such as Sandy.
“Our families have been held hostage by the mismanaged National Flood Insurance Program and by unscrupulous insurance companies,” he said. “The New York Flood Insurance Association will be a strong system with shared risk that will give families a new choice for flood coverage and help keep premiums affordable so that they can remain strong and secure in their own homes.”