On October 17, 2024, U.S. Congressman Josh Gottheimer (NJ-5) introduced a bipartisan effort aimed at easing the burden of rising flood insurance costs for New Jersey homeowners. The Flood Loss Offset and Affordability Tax Credit Act (FLOAT Act), co-led by Congressman Andrew Garbarino (NY-02), proposes a $1,000 annual tax credit for flood insurance policyholders. This initiative applies to both those purchasing through private insurers and the National Flood Insurance Program (NFIP). The aim is to make flood insurance more affordable in an era where extreme weather events are becoming increasingly common.
Flood Insurance: Rising Costs and Declining Coverage
Flooding remains New Jersey’s most frequent natural disaster, with nearly 100,000 homes in the state’s Fifth District facing a greater than 80% chance of flood damage over the next 30 years. However, the affordability of flood insurance has been a growing concern. In 2022, a decade after Superstorm Sandy, New Jersey saw a 15% decline in NFIP policies. Costs have continued to increase, with the average annual flood insurance premium reaching $1,152. Nationwide, only about 27% of homeowners have flood coverage, and the NFIP lost over 100,000 policyholders in 2023 alone.
Gottheimer highlighted these troubling trends, emphasizing the economic burden placed on homeowners who face increasing flood risks due to climate change. He noted that without affordable insurance, many families must choose between purchasing coverage or risking their life savings to recover from flood damage.
Details of the FLOAT Act
The FLOAT Act aims to offset the high cost of flood insurance by providing a $1,000 tax credit to households purchasing flood coverage. Congressman Gottheimer described this measure as a way to help families stay financially afloat amidst rising premiums, making it more feasible for homeowners to protect themselves against costly natural disasters.
“We need to do everything we can to make flood coverage more affordable,” said Gottheimer. “This $1,000 tax credit is a crucial step towards ensuring that more families can afford the protection they need.”
Legislative Efforts to Reform Flood Insurance
In addition to the FLOAT Act, Congressman Gottheimer is advocating for broader reform of the NFIP. He is pushing for the passage of the National Flood Insurance Program Reauthorization and Reform Act, a bipartisan bill aimed at extending and improving the NFIP. The proposed changes include better mapping of flood zones, faster claims processing, and caps on premium increases to prevent steep annual rate hikes.
Gottheimer also urged Congress to pass the Federal Disaster Tax Relief Act, which would provide broader tax relief for individuals impacted by recent disasters, including floods. He stressed the importance of bipartisan support for these measures to address the growing impact of climate-related disasters on American communities.
Local Support for Flood Insurance Relief
The announcement was made in Bogota, NJ, where Gottheimer was joined by local officials, including Bogota Mayor Danielle Fede and members of the Bogota Council. The congressman also acknowledged the ongoing efforts of first responders and the New Jersey National Guard, who have provided critical support during recent flooding events.
The FLOAT Act, along with efforts to reform and extend the NFIP, represents a significant push to improve flood resilience and affordability for families across New Jersey and beyond. As extreme weather events become more frequent, lawmakers are seeking solutions to ensure that families can protect their homes without bearing unsustainable financial burdens.