The high cost for flood insurance is front and center of the latest phase of Risk Rating 2.0n which went into effect April first. The new rating system sets the price of flood insurance by property instead of by flood zone, and many could see their flood insurance premiums go from a few hundred dollars to a couple of thousands of dollars every year. I spoke with U.S. Congressman Garrett Graves on the impact this has for the people of this state.
What is the latest on Risk Rating 2.0?
The Biden administration decided - on their own - to put this policy in place. The Obama and Trump administrations decided not to do it. I want to be clear that Congress did not act on this. These plans went into effect on April first- worst April Fools' joke ever! It raises flood insurance rates for people all across the country. We have seen examples in South Louisiana where people are currently paying $560 a year. Their new rate is going to be $7,000 a year!
In some cases there are communities that are kind of teetering economically right now. This risk rating could wipe out entire communities, could it not?
Absolutely, so many residents are having to deal with inflation, recovering from Hurricane Ida, high gas prices, supply chain issues… this risk rating is just compounding the problem. We need to communicate the true risk to people, but the deal is that the solution for South Louisiana is to build flood protection, to build hurricane protection projects, and to restore the coast. It's not to leave people in vulnerable spots and to charge them completely unaffordable rates that forces them out of these great communities around South Louisiana.
How can we really assess our flood risks in the state?
We need to use better technology and convey the risk to people in terms of what the threat is. In South Louisiana we've lost 2,000 square miles of our coast. That's like wiping the entire state of Rhode Island off the map. Meanwhile, Louisiana gets water from portions of Canada, New York, and Montana. How in the world do you charge somebody from South Louisiana more money because of what Canada's doing, or because of what the federal government largely did to our coast? That's not just!
If someone happened to get a new flood policy and they didn't have an existing policy on the same structure; those rates went into effect October 1st of 2021. If you have an existing policy that will be renewed, the new methodology used to develop your premium will be utilized starting today, right?
If you have an existing policy, your flood insurance premium will increase at 18% a year. If it's a new policy it'll jump overnight to a much higher price.
