Flood insurance policyholders voice frustrations over rising costs
FEMA data shows the majority of policies are in areas with storm surge exposure
NEW ORLEANS (WVUE) - As hurricane season approaches, flooding is a concern for people in south Louisiana and so are the rising flood insurance costs many are experiencing.
Kelley Williams says her coverage increased.
“Yeah, I’m going to keep it. Ever since Katrina, I pledged to keep it whatever so I’m still keeping it, but it’s going to get harder and harder to do,” said Williams.
Joel Cowden is waiting to see what his next premium will be.
“Yes, pretty concerned about it, pretty concerned, we’ll see,” he said.
Stephen Lovecchio, is a branch owner with TWFG Insurance in New Orleans.
“We’re seeing the 18% increases, so we’re seeing $600 premiums go to $750, and next year we’ll see them at $950,” said Lovecchio.
But in some other areas, the cost of flood insurance is higher.
Lovecchio says it does not benefit the National Flood Insurance Program if it loses policyholders. “What I think they’re doing is short-sighted as far as the NFIP in general,” said Lovecchio. “By changing it up and making a lot of people get rid of their flood insurance again it’s short-sighted because you would rather have them pay at least something over a 20, 30-year period.”
He says elevating your home can help in terms of the cost of flood coverage.
“If your house is three feet above the ground right next to your house then you’re going to get a cheaper price than your neighbor right next door that is built on a slab,” said Lovecchio.
According to FEMA, 284,095 flood insurance policies are in effect in Louisiana and the average risk-based cost of insurance is $ 1,904 but the average current cost of insurance is $813. Risk-based is what policyholders would pay if they were charged the full actuarial rate under FEMA’s Risk Rating 2.0 Methodology which took effect in October 2021 and is used to calculate what premiums are for individual properties.
A FEMA graphic says over 84.3% of flood insurance policies in Louisiana have exposure to storm surge and outlines the range of cost of insurance.
U.S. Sen. Bill Cassidy, R-Louisiana, has legislation that aims to help some people afford flood insurance.
“In the legislation that we’re proposing there’s an income threshold which is pretty generous below which if you cannot afford your premiums, you would have some assistance for those premiums, a discount if you will,” said Cassidy. “So, that’s one thing that we’re trying to do to help make it affordable for the homeowner. "
He says the federal infrastructure law he helped to craft has funds to help reduce the risk of flooding.
“The bipartisan infrastructure bill has about $3 billion to help mitigate the risk of flooding, prioritizing communities that have flooded in the last 10 years,” said Cassidy.
Lovecchio says some customers have seen their flood insurance premiums go down.
“We had a lot of A-Zone properties move into X-Zones plus we’ve also had all of the levees that were rebuilt after Hurricane Katrina and they’ve helped change a lot of these flood zones, so we’ve had tons of policies, many, thousands of policies that are cheaper today than they were 10 years ago. Some used to be $5,000, now they’re paying $800,” he said.
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