WASHINGTON – U.S. Senator Bill Cassidy, M.D. (R-LA) today delivered a speech on the U.S. Senate floor demanding Congress take action to halt the massive hikes to National Flood Insurance Program (NFIP) premiums caused by Risk Rating 2.0. Cassidy shared stories from constituents struggling to keep up with the premium hikes, highlighting how the insurance crisis is hurting Louisiana families.
“The National Flood Insurance Program was created as a safety net for the most vulnerable Americans,” said Dr. Cassidy. “However, due to FEMA’s new risk assessment system—Risk Rating 2.0—homeowners are experiencing unprecedented spikes in their insurance premiums, making them unaffordable.”
“I speak to constituents constantly about flood insurance and wanted to share a few of their stories here to highlight the urgent need for Congress to act to make flood insurance affordable again,” continued Dr. Cassidy.
“I urge my colleagues to come talk to me about NFIP reauthorization and reform,” concluded Dr. Cassidy. “We are working on bipartisan legislation that fixes this mess, makes Risk Rating 2.0 transparent, and makes flood insurance affordable again. Let’s discuss a way forward.”
Cassidy’s speech as prepared can be found below:
Madame President,
Hurricane season started last Saturday, June 1st.
People who live in my state know that hurricanes always bring flooding along with them.
It’s serious—and Louisianans know we must prepare.
But this year marks another hurricane season in which fewer Louisiana homeowners can rely on the National Flood Insurance Program to guard them in the case of a flood.
The National Flood Insurance Program—or NFIP—was created as a safety net for the most vulnerable Americans.
It covers 4.7 million American homes.
However, due to FEMA’s new risk assessment system—Risk Rating 2.0—homeowners are experiencing unprecedented spikes in their insurance premiums, making them unaffordable.
I speak to constituents constantly about flood insurance and wanted to share a few of their stories here to highlight the urgent need for Congress to act to make flood insurance affordable again.
I recently heard from a constituent in Larose, Louisiana who switched from a NFIP plan to a private insurance carrier because he could not afford to keep his NFIP plan.
However, his private insurance plan isn’t exactly cheap either—costing him twenty-two hundred dollars a year.
Compare that to the price he would have paid with NFIP—somewhere between forty-five hundred and five thousand dollars, and that was two years ago!
Imagine what he would be paying now if he stuck with NFIP.
His house is 6 feet above sea level.
But NFIP ignores that because homes are grouped by zone instead of by elevation.
What’s worse is that his property has never flooded—never.
According to his neighbors, the last time the area flooded was because of Hurricane Juan in 1985—but again, his property didn’t flood.
This story isn’t unique or uncommon.
Families across Louisiana and the country are struggling with similar situations.
One retired couple living on Bayou Lafourche near Raceland says they dropped their NFIP policy because their premiums were rising from five hundred dollars to twenty-five thousand annually once fully realized.
Now, premium increases are capped at 18 percent year over year, but that 18 percent compounds and becomes quickly unaffordable.
Their son who lives just down the road from them in Raceland will see his flood insurance increase from five hundred dollars to sixty-three hundred dollars.
This is unsustainable for homeowners.
And if you buy a new policy, then you are subject to the new rates with no grace period.
Another family in Lockport, Louisiana just bought a new home and chose not to have flood insurance because the premium would have been over a thousand dollars.
They had the option that many homeowners don’t have.
Most mortgages in Louisiana require homebuyers to get flood insurance. There is no way out for the family who can’t afford to buy a home with cash.
I had another constituent who is a business owner and invested 1 point 2 million in a brand-new office building and warehouse in the town of Cut Off, Louisiana.
They are behind a levee system that has never failed and were required to elevate the office 7 feet off the ground.
He tells me that if he had taken out a mortgage, he would have had to pay tens of thousands of dollars in combined insurance between flood and property insurance that would exceed the actual mortgage.
He questioned why other businesses would move to his town if they could build elsewhere for much cheaper and with less red tape.
Risk Rating 2.0 is suffocating economic growth in communities struggling to keep up in an already sluggish economy due to President Biden’s failed economic agenda.
Another man in Boutte, Louisiana told my office that his premium will increase to over eight-thousand dollars annually in just 13 years.
His flood insurance before Risk Rating 2.0? Five-hundred seventy dollars.
At their current rate, his flood insurance premium will eclipse his mortgage in about two years.
I’ve said this before on the Senate Floor and will say it again.
Someone who has never flooded should not be paying more for flood insurance than they pay for their mortgage.
Period. End of story.
Another constituent in Montegut, Louisiana might lose his house altogether because he can’t afford to keep it.
A Korean war veteran and his wife—both in their 80s—took out a reverse mortgage on their home several years ago to help pay medical bills.
They live behind a 12-foot levee, but their reverse mortgage required them to carry flood insurance, which now costs him sixty-five hundred dollars a year.
That’s on top of what they pay for homeowner’s insurance.
If their flood insurance continues to rise, they will need to give up their home.
That’s not right.
We were elected to serve. And we are failing if we just let folks like this be driven out of their homes because FEMA decided they are going to develop a new system to assess risk.
Some of these stories are more drastic than others.
But all of them have a common theme: they don’t flood and they can’t afford insurance.
Well, if you can’t afford insurance and don’t flood anyway, you’ll likely consider dropping your insurance.
When that happens, the pool of policyholders shrinks, and the program enters what’s called an actuarial death spiral.
FEMA itself forecasted that over 20 percent of policyholders would leave the program within 10 years.
We are setting the program up for collapse. Congress needs to do something before it’s too late.
But I want to be clear, this is not just a Louisiana or Gulf Coast issue.
It’s an issue that affects the entire country.
We are seeing flooding devastating families across the country—and in states that don’t typically make you think “flooding”.
Virginia, Missouri, North Carolina, South Carolina, New York, New Jersey, Florida, Alabama, Mississippi, Pennsylvania, Texas, California, and Louisiana are all states that have had more than one billion in NFIP claims since 1978.
And those are just the states that have been hit the hardest.
44 states have had over fifty million in total NFIP claims, and every single state has had at least five million in claims.
This is a national issue, not just a coastal issue.
We have a bipartisan solution.
I urge my colleagues to come talk to me about NFIP reauthorization and reform.
We are working on bipartisan legislation that fixes this mess, makes Risk Rating 2.0 transparent, and makes flood insurance affordable again.
Let’s discuss a way forward.
Because if these stories make one thing clear, it’s that doing nothing is not an option.
With that, I yield back.
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Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.