Sen. Cassidy pushes for a lower cap on annual flood insurance rates

NEW ORLEANS (WVUE) -- Flood insurance costs are rising for many property owners due to FEMA’s new Risk-Rating 2.0 methodology for determining flood coverage premiums. So Sen. Bill Cassidy (R-Louisiana) is proposing changes that could better cap annual increases for consumers.

“Our goal is to make this affordable, accountable to the taxpayer, sustainable to society and we think we can do that,” said Cassidy.

FEMA says existing statutory limits on rate hikes require that most rates not increase more than 18% per year. Cassidy is partnering with Sen. Bob Menendez (D-New Jersey) on a bill to reform the flood insurance program, including capping flood insurance increases at the maximum level FEMA allows.

“Before Risk Rating 2.0, premium increases were capped at 9 percent per year,” Cassidy said. “Under Risk Rating 2.0, I think that went up to 18 percent. Now, we would again lower it to 9 percent as in terms of the maximal amount it could be increased per year. But we also give support for those people who are too poor to be able to afford even that.”

He said assistance for the indigent would be based on need under the bill.

“I don’t think anybody would get it for free, but some people would be able to get a discounted rate. It would provide a voucher for the low-income homeowner,” Cassidy said.

He expects the legislation to come up for a Capitol Hill hearing soon.

“I’m working directing with the committee chair to make sure that we get a hearing,” said Cassidy.

The bill also would extend the National Flood Insurance Program for five more years.

Meanwhile, at the state level, Louisiana Insurance Commissioner Jim Donelon says the state’s program that gives incentives to insurance companies to write new coverage already has benefitted thousands of homeowners.

“We’re pleased with the progress up until now,” said Donelon.

A report Donelon’s staff provided to Fox 8 shows that since the state recently handed out millions in grants to eight insurers to incentivize them to write new wind and hail policies, 17,197 new policies have been written statewide by the insurers.

“That program is open to every parish in the state, now the demand is much greater along the coast,” said Donelon.

Louisiana’s coastline remains vulnerable, and Cassidy says the federal infrastructure law he helped to craft provides money to fight the problem.

“The bipartisan infrastructure bill has put hundreds of millions of dollars -- and I expect eventually billions of dollars -- towards our state for those projects,” Cassidy said.

And there are federal funds dedicated to reducing flooding.

“In terms of flood mitigation, in the bipartisan infrastructure bill there’s $3 billion to help mitigate the risk of flooding for communities which have flooded in the previous 10 years,” said Cassidy. “I’m told that Louisiana has submitted about 50 percent of the claims for the National Flood Insurance Program. Pro-rate that, if my numbers are right, we might end up getting $1.5 billion to help mitigate risk of flooding in our state.”

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