Louisiana delegation pushes for reform of National Flood Insurance Program

Louisiana

WASHINGTON D.C. (BRPROUD) – The Louisiana delegation is making a push in Congress to reform the National Flood Insurance Program. A second extension will be debated as lawmakers work to keep the government funded.

A temporary extension of the National Flood Insurance Program was added to the government stopgap funding bill in September but that comes to an end in a month. Now Senators Bill Cassidy and John Kennedy along with Representative Clay Higgins have filed legislation to adjust FEMA’s Risk Rating 2.0.

The program would adjust insurance rates based on flood risk, which could increase as much as 18% yearly. Only 23% of policyholders are estimated to be getting a cost decrease. There is a concern with the steep increases that thousands will drop their insurance coverage. The delegation is asking for a 9% cap.

“So that people can kind of grow into that increased premium they’re paying annually as opposed to sticker shock,” Senator Cassidy said.

He said the main burden of the rate increases falls heavily on new policyholders and not spreading out the costs is ‘an actuarial death spiral’.

In the House bill, Congressman Higgins lays out $500-million a year for FEMA to have more up-to-date maps. He suggests their rates are not accurate since the waterways have not been properly mapped. 

“I am hearing from Louisiana insurance agents that they’re not receiving this basic information from FEMA that they need to tell the homeowner ‘this is how much you save if you elevate your property’,” Sen. Cassidy said. “FEMA needs to be transparent and responsive to these information requests from Congress and the public.”

It also puts aside dedicated funds for specific policyholders like business interruption and flood mitigation grants.

“…but would also reward those homeowners that did things to mitigate their flood risk, to reward communities that do things to mitigate for communities at large,” Sen. Cassidy said.

The senators have asked the Biden Administration to delay the implementation for the Risk Rating 2.0 a second time, but there has been no word on if that will happen.

Louisiana is one of a handful of states that actually benefit from the program, so Cassidy said it can be a challenge to get the rest of Congress on board. He  noted the bipartisan infrastructure bill, that is still awaiting a vote, addresses some issues with the program

“They address waste, abuse, mismanagement, those things plaguing the program. It beefs up pre-disaster mitigation and coastal protection,” Sen. Cassidy said.

The bills in the House and Senate are yet to be debated. The stopgap bill comes to an end on December 3rd. The new Risk Rating 2.0 is set to begin in April 2022 for current policyholders.

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