The 500,000 property owners in Louisiana affected by flood insurance may not be able to afford coverage under the state’s new flood insurance plan.
The Federal Emergency Management Agency has revealed that nearly 1 million Americans will not be able to afford flood insurance by the end of the decade under the new Risk Rating 2.0 policy that is being implemented later this year as a way to bring money to the program owed to taxpayers $20.5 million.
The Associated Press disclosed the statistics through a Freedom of Information Request to FEMA.
The new Risk Rating 2.0 “provides rates that accurately reflect the risks of flooding and ensures the National Flood Insurance Program will be available for this generation and generations to come,” by changing the way the government assesses risk, according to a FEMA paper.
At first, the app looked at the height of a building and whether it was in a flood zone, but now it calculates the distance to the water, the cost of rebuilding and more. And for many homeowners in flood-prone areas, it’s the only insurance available.
FEMA acknowledges that many will see their premiums increase, but has repeatedly downplayed an internal report outlining the implications of Risk Rating 2.0, telling the AP that the 20% of policyholders who can no longer afford the increased premiums was “misleading” and “out of mind.” “
FEMA told the AP there was “no investigation or report to share,” but the results of a Freedom of Information request released Saturday revealed otherwise.
The new rating system went into effect for new flood insurance policies issued on or after October 21, 2021 and policy renewals on or after April 1.
Both Republican and Democrat lawmakers from many states have pushed back on Risk Rating 2.0, citing rising rates for homeowners in Louisiana and elsewhere, and have called on the Biden administration to halt implementation.
In a letter to FEMA Administrator Deanne Criswell in November, U.S. Senators Bill Cassidy, R-Louisiana, and Robert Menendez, D-New Jersey, questioned why the agency withholds important information from those who have the facts. about Risk Rating 2.0, and asked for feedback.
Criswell said that without the new plan, “hundreds of thousands of single-family homeowners would continue to pay more than they should, which equates to an additional payment of $237 million for a six-month delay and $500 million for a one-year delay.”
Criswell wrote that 600,000 single-family home owners received less money and replacements.
FEMA’s fact sheet for Louisiana states that “97% of current payments would decrease or increase by $20 or less per month under Risk Rating 2.0” and stated that the increase should decrease by 18% per year as set by Congress in most cases. .
FEMA, however, has not commented on what the increases may have been.
“What they’re not telling you is what the growth will be in 10 years,” said Ty Bofferding, Cassidy’s communications manager. “It’s using information to create an interesting picture.”
Menendez released a statement saying the AP report “shows FEMA’s failure to be transparent with lawmakers, Congress, and the American people.”
Local resident Jean Lafitte recently told WVUE that their flood insurance premiums have doubled or tripled, and homeowner’s insurance companies are following similar increases. An analysis by The Advocate in February found that Risk Rating 2.0 is expected to increase at a rate of more than 129% for nearly half of Louisiana policyholders, while one in 10 will see premiums jump 400%. Another 20% are expected to see a one-time decrease of about $960, on average.
In late March, Cassidy joined with US Senators Cindy Hyde-Smith, R-Mississippi, John Kennedy, R-Louisiana, Roger Wicker, R-Mississippi and Marco Rubio, R-Florida to introduce legislation called Homeowners Insurance Transparency and Protection Actwhich would freeze prices until FEMA addresses issues related to public information and comments, the complaint process, financial impact, data reliability and submits to independent peer review.
Cassidy also contacted Kennedy and Sen. Kirsten Gillibrand, D-NY, in March to introduce the Insurance Pricing Transparency Act to help taxpayers understand the true cost of Risk Rating 2.0.
Last week, Cassidy introduced legislation to reauthorize the Flood Insurance Program for one year with many sponsors. The Biden administration, meanwhile, wants a 10-year extension and 17 legislative changes to the program that would limit access to many who need it most.
The Biden administration is requesting that the amendment reduce the amount to eliminate the $20.5 million debt of the program to the US Treasury, according to the Administration.