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Scalise meets with local leaders over flood insurance concerns

Published: Oct. 8, 2021 at 7:16 PM CDT
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NEW ORLEANS (WVUE) - Republican Whip Steve Scalise is calling on President Joe Biden to “stave off” changes in the National Flood Insurance Program which Scalise says could be devastating to some Louisiana property owners.

Scalise met with leaders of Jefferson, St. Tammany, Plaquemines, and Lafourche Parishes on Friday at the Joe Yenni Government Building in the Elmwood section of Jefferson Parish.

Afterward, they addressed members of the media.

“The premiums that families are starting to face are just devastating and they’re not sustainable,” said Scalise.

Scalise said he spoke to Cedric Richmond, a senior adviser to President Biden about the growing concerns that premiums will be out of reach for some people. Richmond is a former congressman who represented New Orleans, portions of Jefferson Parish, and Baton Rouge.

“He’s surely aware that this is a problem,” Scalise said. “We’re urging the Biden Administration to stave off Risk Rating 2.0.”

Risk Rating 2.0 is what FEMA’s new pricing methodology is called for the flood insurance program. FEMA underwrites the insurance program.

Scalise said FEMA has not been transparent enough and Jefferson Parish President Cynthia Lee Sheng said more information about the changes and how they will impact residents long-term is needed.

“We represent in Jefferson Parish, our policyholders, almost 20%, 20%-25% of the state’s policyholders, so obviously this will really affect us in Jefferson Parish,” Sheng.

Lafourche President Archie Chaisson says many people are still trying to cope with the effects of Hurricane Ida which barreled across southeast Louisiana on August 29.

“After Hurricane Ida hit less than 37 days ago to have this come through on October 1, is a slap in the face to all of our residents,” said Chaisson.

Kirk Lepine is president of Plaquemines Parish.

“Bringing recognition to FEMA to make them understand that people cannot afford certain policies that they continue to increase,” said Lepine.

There are fears some property owners could see their annual premiums go from hundreds of dollars to thousands.

FEMA says 495,900 flood insurance policies are in effect in Louisiana and it says under Risk Rating 2.0., 101,174 policies will see immediate decreases, 343,246 policies could on average have a $0 to $120 increase per year, and 34,352 policies would see on average an increase between $120 to $240 a year.

Additionally, FEMA says under Risk Rating 2.0 insurance rates will more accurately reflect flood risk and ensure that the NFIP is around for generations to come. Under the program rate increases are capped at 18% per year and can no longer exceed $12,000.

The new program takes into account different kinds of flooding that can damage property including storm surge, a river that overflows, heavy rainfall, and coastal erosion, and not just a property’s elevation.

Plans to implement Risk Rating 2.0 have been years in the making.

Scalise acknowledges some members in Congress have no appetite for dealing with the financially-strapped flood insurance program.

“I think we need to be candid about where opposition is coming from too because there are people who have been opposed to the National Flood Insurance Program for a long time and it’s people on both sides of the aisle, you’ve got conservatives who say they don’t want a federal program and look I’m a conservative, I wish there wasn’t a need for a federal program for flood insurance but there’s not a private marketplace today, I’d like to get to a private marketplace but if there’s not one, this is the only game in town, we need to make sure it works. On the other side of the aisle you’ve got people who say they just don’t like the idea that there are people near water,” said Scalise.

GNO Inc. leads the Coalition for Sustainable Flood Insurance which includes 35 states and has been working to get Congress to reform the flood insurance program in a way that keeps it affordable, attracts more policyholders, and makes it sustainable for the long term. And Congress has been unwilling to reauthorize it for the long term.

Michael Hecht is President and CEO of GNO Inc.

“Ideally this would go through Congress, go through congressional rulemaking, and then be launched in tandem with a long-term, sustainable five-year renewal of national flood insurance,” said Hecht.

Members of Louisiana’s congressional delegation say high premiums will only lead to more people dropping the coverage and further jeopardizing the program’s future.

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