Flood insurance hikes set for scrutiny in key federal court hearing in New Orleans [The Advocate, Baton Rouge, La.]

Sep. 13—Sweeping changes to the nation's flood insurance program that are leading to steep hikes for many in Louisiana will be scrutinized in a federal court hearing on Thursday in New Orleans.

The hearing is part of a lawsuit filed in June by Louisiana, nine other states and a list of parishes, municipalities and levee boards. It calls on FEMA, which oversees the National Flood Insurance Program, to halt the changes and return to the drawing board.

Thursday's hearing will examine the states' request for a preliminary injunction halting the new policy, known as Risk Rating 2.0, as well as FEMA's call to dismiss the case. It will be held in federal court for the Eastern District of Louisiana, though an immediate ruling appears unlikely in the complex case.

How much will your flood insurance rise? Check this interactive map

Louisiana has more NFIP policies per capita than any other state, and Solicitor General Liz Murrill noted that the program's influence extends to decisions on flood protections and other types of floodplain management. That's in addition to concerns that the premium hikes, which are being phased in over years, will combine with property insurance increases to provoke a raft of home foreclosures.

"We have a deep investment in the people being able to stay in their home, stay in our community, and protect themselves and us from the cost of the damage of flood risk," Murrill said in an interview.

Attorney General Jeff Landry, Murrill's boss, said in a statement: "We are fighting back to ensure that the people of Louisiana are able to stay in our great state — not sell their homes, close their businesses and migrate away from their families because of government policies that lack of transparency and common sense."

FEMA said in response to questions that it does not comment on pending litigation, but the agency has defended the new premiums in the past, both publicly and in court filings. It says the new premiums are fairer for everyone since they are based on the flood risk of each individual home, unlike the flawed map system of the past.

Premium increases are limited to 18% per year by law, but FEMA released projections in April showing what Louisiana homeowners are expected to pay on average once all hikes are phased in. The projections are evolving based on changes in risk, including due to climate change, and other factors, but they paint a grim picture.

Those projections showed the average single-family home in Louisiana getting a 134% increase. Especially flood-prone areas will see much higher increases, with Plaquemines Parish projected at the time to be hit with the state's highest at 545% on average. Orleans was projected to see 99% increases, Jefferson 150% and St. Tammany 126%.

At the ZIP code level, the highest projected percentage increase in the nation in the April data was Plaquemines Parish's 70082 ZIP code, with average hikes of 1,098%.

The new pricing system began in October 2021 for new policies and April 2022 for renewals.

It uses an intricate algorithm to compute the premium, incorporating a range of data, including cost to rebuild, distance from water, construction type and ground elevation. But much of the data is proprietary and not available publicly, leading to criticism that the new program lacks transparency.

FEMA says the new system does away with the practice of premiums for pricey beachfront houses essentially being subsidized by older and smaller homes. But there are fears of unintended consequences in south Louisiana, where everyone lives near water and those families are often working class.

State and local officials also argue that they don't believe the new system is accurately accounting for flood protections such as levees.

The changes are in part meant to help put the NFIP on a more financially sustainable path by setting rates more in line with private-sector practices. The program is currently $20.5 billion in debt.

But the lawsuit argues that the new system betrays a mandate to provide flood insurance coverage at reasonable rates.

The nine other states in the lawsuit are: Florida, Idaho, Kentucky, Mississippi, Montana, North Dakota, South Carolina, Texas and Virginia.

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