We're one week away from the start of hurricane season, and the future of the National Flood Insurance Program remains in limbo.
Members of Congress, including those from Louisiana, are urging their colleagues to pass a long-term reauthorization of the program with a lower annual cap on the cost of flood insurance. Still, Louisiana's insurance commissioner says FEMA's new risk rating for flood insurance poses a major threat to the state and its people.
"Risk Rating 2.0, even it that were to pass, is still a huge threat to our economy," Insurance Commissioner Jim Donelon told WWL's Tommy Tucker.
That's because, according to Donelon, actuarial rates would kick in if a new property owner tries to buy flood insurance for land that wasn't insured by the previous owner. Donelon noted that without flood insurance, those landowners won't be able to get federally-backed mortgages.
"They are draconian and render in many cases--I dare say, thousands of cases--properties overnight being worthless," Donelon said.
Donelon says Congressmen from the South and from the Northeast are working together on plan that would at the very least keep the price cap that's been in place for almost a decade.
"No more than 18 percent per year increases on the cost of a residential policy."
Donelon says there's a bipartisan attempt in Congress to cap those increases at or below the current annual rate of 18 percent.
"The effort to try to make that more affordable is being led by our delegation with Democrats from the Northeast and Republicans from across the Gulf Coast to lower that to the nine-, ten-, eleven-percent-per-year increase in those rates."
Despite the rising rates of flood insurance, Donelon says recent storms prove that it's still vital for homeowners to have flood insurance.
"We've learned from those rain and hurricane-driven flooding events to get flood insurance. It's the best insurance buy any property owner anywhere in our state can make. Even these days, it's still subsidized by the federal government."