Louisiana congressional delegation has run out of patience on flood insurance changes

WASHINGTON – With thousands of south Louisiana homeowners receiving startling increases in the cost of their flood insurance, Republican U.S. Sen. Bill Cassidy, of Baton Rouge, wrote the Biden administration Thursday morning that he has run out of patience waiting for a meeting to explain what went into calculating those new rates.

Cassidy wrote Deanne Bennett Criswell, administrator of the Federal Emergency Management Agency, noting that he had asked for a meeting in October 2021 and more than a year later is still waiting for an answer.

"Policyholders stand to see thousands of dollars in annual premium increases over the next several years," Cassidy wrote in the letter released Thursday morning.

"The lack of communication greatly diminishes any confidence in FEMA's ability to implement this Risk Rating 2.0. If the Biden administration refuses to halt implementation of this disastrous policy, the least they can do is provide constituents with the basic information they need to navigate this new rating regime," Cassidy wrote.

Cassidy's frustration is shared by Democratic U.S. Rep. Troy Carter, of New Orleans.

"The Louisiana congressional delegation is united in our shared concern for Risk Rating 2.0's impacts on our constituents," Carter said. "While it has been frustrating to not have much traction with delaying, adjusting, or pausing FEMA's new rating system as I would prefer, myself and my office have communicated with FEMA and Administrator Criswell about this topic several times."

Carter had scheduled a meeting to specifically discuss the issue with U.S. Homeland Security Secretary Alejandro Nicholas Mayorkas, Criswell's boss. That meeting was canceled at the last minute as government officials scrambled to react to Hurricane Ian.

"I look forward to rescheduling that meeting soon so that we can further discuss the affordability crisis that Risk Rating 2.0 is unloading upon many of my constituents," Carter said.

The National Flood Insurance Program diverts the costs of residential flooding to the federal government to aid in recovery. NFIP issues nearly 5 million policies providing $1.3 trillion in coverage in more than 22,000 communities.

After years of complaints, mostly by congresspeople representing areas that don't flood, FEMA through three presidents have been attempting to lower the cost of flood insurance for taxpayers across the nation.

One method is to try to link premium prices to the likely cost taxpayers will bear from repairing a flooded structure is called Risk Rating 2.0. In a state with as many waterways as Louisiana, Risk Rating 2.0 means significant changes in the way things always have been done.

The new pricing methodology, probably the biggest change since the program was established in 1968, includes specific features of a specific property, such as nearby levees, elevation and how often the property has flooded in the past.

But FEMA hasn't been specific about what factors are included in the ratemaking formula.

"In the past, agents could tell policyholders how much elevating their home, or making other improvements, would reduce their flood insurance rates," Cassidy wrote. "Today, the information FEMA provides is not sufficient for this purpose. For example, the Discount Explanation Guide includes only six foundation types, none of which correspond exactly to the most common kind of foundation in south Louisiana. If you are building a new home, you need to know how high to elevate to receive a flood insurance premium you can afford. This is a serious problem for the new home construction market, as homebuilders don't know what metrics to target. It also affects current policyholders who cannot make plans to address the coming rate hikes as they don't know what FEMA will accept for mitigation."

House Minority Whip Steve Scalise, R-Jefferson, held a panel discussion on flood insurance earlier this week.

"Let's at least have some hearings where FEMA can come and explain how they came to the decision to come up with the methodology behind Risk Rating 2.0," Scalise said after the Monday roundtable in Metairie. "I think it's embarrassing that FEMA refuses to even meet today with people who build levees, parish leaders who invest millions and billions of dollars into better flood protection – and after they do that FEMA still gives higher premium increases and won't explain how they came to those rate hikes."

Louisiana's congressional delegation has been asking FEMA to explain its pricing methodology for some time.

In August, all six members of Louisiana's House delegation signed a letter to FEMA Deputy Associate Administrator of Insurance and Mitigation David Maurstad asking for answers, particularly after their constituents were reporting dramatically increased premiums. About half the flood insurance policyholders have reported premium increases of about 129% over last year's price.

"In Louisiana, many have experienced dramatic increases in the cost of policies without any explanation of what risk factors are causing these increases," reads the August 4 letter. "We continue to be extremely concerned about Risk Rating 2.0's treatment of flood protection and mitigation measures when setting individual rates. We have discussed these concerns with the people of Louisiana who are experts on flood protection and mitigation, including levee protection, home elevation, and coastal restoration, and it is increasingly concerning that there is still inadequate and insufficient information on how these protection efforts will be recognized under Risk Rating 2.0."

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