Thousands in Louisiana drop flood insurance despite more frequent, damaging storms. Why?

LAFAYETTE — Corey Rabeaux knows his house is always at risk of flooding.

It happened in 2016. Then 2017. Then 2019.

After the last time, resigned to fate, he decided to leave a 6-inch space below his walls so he wouldn't have to keep replacing them.

"There's no use fixing it," he said.

The federal government, which manages the National Flood Insurance Program, joined Lafayette Parish in offering Rabeaux a free home elevation, the main fix the nation has for flood-prone properties.

After years of waiting, work was set to begin on that project when things fell apart. Rabeaux, 49, was laid off from his job as an electronics technician at Halliburton. And a new federal plan for setting flood insurance rates had taken effect, raising his premium from a few hundred dollars a year to over $1,300.

When a big insurance bill came due, he couldn't afford it — and dropped his coverage. That disqualified him from the grant.

The federal government for decades has provided a crucial assurance to most people in low-lying areas around the country: affordable flood insurance. For those most directly in harm's way, the feds spent billions of dollars to elevate or otherwise move their homes.

But now, for many in Louisiana, the system is collapsing. Flood insurance premiums are skyrocketing, which along with home insurance spikes are pushing people out of their homes. And efforts to flood-proof homes are not moving at a fast enough pace to stave off rising flood risk.

Flood insurance costs are spiraling because of FEMA's new system for setting rates, aimed at making the cash-strapped program solvent in an era of worsening storms. It has led to huge increases for thousands in south Louisiana. Louisiana is home to nearly half the policies in the parts of the U.S. experiencing the highest premium increases.

Since 2022, 42,797 people in Louisiana have dropped flood insurance as premiums soar, representing 9% of policyholders. It's a staggering, unsustainable tally.

Meanwhile, a decades-long effort to flood-proof the homes that are most at risk – and costliest to the flood insurance program – is failing to keep up with rising risk. Since Hurricane Katrina, an average of 1,400 properties per year have been added to a list of homes and businesses that flood repeatedly in Louisiana.

Over the same span, the state has only been able to reduce the flood risk at an average of 550 previously flooded properties per year, a Times-Picayune analysis of FEMA data shows.

That means that for every Louisiana property on the repetitive loss list that is elevated, more than two new ones are added. And the list only includes buildings with flood insurance, suggesting the scope of the damage may be worse.

"This is the hardest question for all of us in south Louisiana," said Jackie Dadakis, CEO of Green Coast Enterprises, a sustainable development company. "Waving a magic wand and saying we have a better building code today doesn't fix the problem."

'That's not sustainable'

For the past few years, Oscar Santos has made his living elevating homes across New Orleans. Almost all of his clients have gotten federal grants. For many, the situation is dire.

"Sometimes, I go to people's homes and they have sofas and kitchen tables on blocks," Santos said. "They're on bricks or cinder blocks eight inches off the floor. Others have sandbags all around their houses."

The federal government, which pays out flood claims, has sought for decades to encourage local governments and builders to reduce flood risk. It has spent billions on elevating homes at greatest risk of flooding.

Nowhere is the problem more urgent than Louisiana, which has the highest uptake rate of flood insurance in the nation.

The mitigation efforts come after many decades of risky development in floodplains in Louisiana and across the nation. That history has resulted in a massive stock of slab-on-grade homes in low-lying areas that would require billions of dollars to fix.

The problem is not static.

Climate change is heightening flood risk in the state most threatened by it. Not only is Louisiana the heaviest user of the flood insurance program, it has the highest number of insured properties with repeated flood claims: 43,355. One study estimated that Louisiana's home values may be overvalued by nearly $4 billion because of unpriced flood risk.

Elevating homes has long been the go-to solution. But homeowners are increasingly wary of the bargain they must agree to in order to get assistance to elevate: a promise that they maintain flood insurance in perpetuity. The promise is attached to the home even if they later sell it; future owners would be required to pay flood insurance as well.

Louisiana officials have sued and put forth legislation in Congress to address the exodus from the program, but none have worked so far. U.S. Sen. Bill Cassidy, who has tried unsuccessfully to tweak the program, said the program is falling apart because of sharp increases in premiums.

"You're just going to kill the program," he said. "That's not sustainable."

Not keeping up

When Lauren Brinkman first entered the flood-control world years ago, convincing homeowners who repeatedly flooded to take federal grants to elevate was "low-hanging fruit." The pitch was simple: You'll have to keep flood insurance forever, but your rates will drop dramatically, and you won't have to keep gutting your home after a storm.

"That's no longer the case," said Brinkman, a floodplain administrator in Mandeville.

Some who agreed to the deal years ago are now paying more for flood insurance than they did before their home was raised. The program is also beset by lengthy delays and a lack of money, despite a recent boost in funding from the bipartisan infrastructure law signed by President Joe Biden. The tens of thousands who are dropping flood insurance are disqualifying themselves from receiving most federal aid for elevating.

"They are saving their biggest asset, their home, but can they even afford to live there if home and insurance rates and flood insurance rates aren't dropping?" Brinkman said. "They're going to lose the home regardless."

Some solutions have proven to work. The $14 billion levee system protecting New Orleans, rebuilt after the system's collapse during Katrina, has so far held up. FEMA has found that elevating saves money in the long run. In one study, it found that for every dollar the federal government spent on elevating a group of homes in Jefferson Parish, it saved $2.23 in would-be flood losses during Hurricanes Isaac and Ida. And the Army Corps, which has historically embraced larger-scale flood controls, is embarking on a plan to elevate thousands of homes across Louisiana.

But the solutions aren't happening fast enough to stave off growing risk. And in the meantime, flood insurance increases are coinciding with spiraling home insurance costs, threatening home values, squeezing residents and pushing people out of the state.

"We are seeing an increase in the damages to properties. We're seeing more frequent, more damaging storms," said Sandra Dugas, assistant director of hazard mitigation for the Governor's Office of Homeland Security and Emergency Preparedness, which serves as the middleman between local governments and FEMA for mitigation dollars.

"We continue to fight the good fight and do good mitigation. It doesn't seem to be keeping up with the flooding."

'We're stuck here'

Tens of thousands of people are dropping flood insurance, raising questions about whether communities across the state are equipped to recover from hurricanes and rainstorms.

The decreases are happening in nearly every parish, and are especially acute in some of the most flood-prone in the state. In the two years since the new rates went into effect, Jefferson's policies fell by 7,400, Orleans fell by 5,600, St. Tammany by 4,700 and Calcasieu by 3,700.

Peter Waggonner, who works on flood insurance for GNO Inc., said Louisiana is in a "negative feedback loop" with flood insurance. As people continue dropping policies, the program becomes less financially stable. Fewer people are equipped to recover from worsening flood risk. And FEMA is not incentivizing enough types of mitigation against flooding, like green infrastructure, he said.

The flood insurance program is also paying the U.S. Treasury hundreds of millions of dollars annually in debt service—money Waggonner argues could be better used to elevate or otherwise flood-proof homes. And while Louisiana has high uptake of flooding, other areas around the country are experiencing heightened flood risk that must be addressed, he said.

"Status quo does not incentivize mitigation enough," he said.

The federal flood insurance program deemed Rabeaux's house in Lafayette as high risk, after repeated floods led to insurance claims. Still, he was on the one-yard line of elevating his home, after getting bids from contractors.

Rabeaux had flood insurance for 22 years. But after his unaffordable bill came due, he became one of 3,341 people in Lafayette Parish who canceled flood insurance. But when he dropped his insurance, the consequences were great: he lost his home elevation grant, after violating rules that say recipients must have continuous flood insurance to participate. Rabeaux sent an email to the official managing his grant last year, seeking guidance. "We really don't want to lose this as it only comes once in a lifetime to some but we are stuck trying to figure out where to go now," Rabeux wrote.

The official replied that the rules disqualify him, and suggested he try starting over.

"We're stuck here," Rabeaux said. "If we flood again we have absolutely no help."

All across Louisiana, people with rising flood insurance bills are facing tough decisions.

Kristy Neal's home in Slidell, on the north shore of Lake Pontchartrain, was vulnerable to flooding when she bought it 20 years ago.

The house flooded a few years before she bought it, and again in Katrina. But flood insurance was affordable—a few hundred bucks a year—and for a long time, it stayed dry.

In recent years, things have changed. The house flooded twice in 2021, including during Hurricane Ida. And her flood premium is rising steadily: It's set to increase from $600 a year to $3,300 under the federal government's new rating system.

Neal is among the lucky few to get FEMA funds to elevate her home—though her house flooded last year while she was waiting for work to begin. She'll be required to keep flood insurance in perpetuity in exchange for the aid, which is concerning given the rising premiums. Meanwhile, her home insurance has spiked from $2,000 a year to $10,000.

"We flooded twice in two years," she said. "My house is unsellable. I can't do anything. I almost have to raise it because who would want to buy that?"