KALB Exclusive: Sen. Kennedy discusses Louisiana residents’ insurance woes

ALEXANDRIA, La. (KALB) - With flooding events like those impacting Central Louisiana from intense rainfall Wednesday, Aug. 24, and as hurricane season reaches its peak, lawmakers in Washington D.C. and in the state capitol are working to prepare for possible severe weather fallout.

News Channel 5 sat down with Sen. John Kennedy to talk about how extreme weather events are truly impacting the state, specifically regarding insurance, a crisis that the state has recently been facing.

”I hope we don’t have a hurricane, and if we do, I hope we don’t have a lot of damage,” said Kennedy. “And if we do, I and the other members of the congressional delegation will do everything that is humanly possible to make sure that we get the relief that we need and that our people deserve.”

While the state has received billions in disaster relief over the last five years following Hurricanes Laura, Delta and Ida, Louisiana legislators recognize the increased importance of prioritizing mitigation efforts on the front-end.

That’s why one of the primary concerns for the Louisiana delegation is FEMA Risk Rating 2.0, implemented in 2021, which recalculates the coverage for all Americans under the National Flood Insurance Program.

These new calculations were done through an algorithm determining premiums based on the risk of flooding in those areas, both current risk and probable future risk.

“They say they can put your address into their computer program, and it’s so good, it’s so clairvoyant, it’s so good at predicting the future, that they can look at your home, not your area, but they can look at your individual home, and tell you if you’re gonna flood over the next 10, 15, 20, 50 years,” explained Kennedy.

Those premium changes started in April, impacting about 500,000 Louisiana policyholders, who make up 10% of those in the NFIP.

In a report from the Associated Press on July 22, 2022, FEMA “sent a report to the treasury secretary and a handful of congressional leaders saying higher prices would drive a fall off of 1 million policies compared to the beginning of the decade.”

Testifying before the Senate in September 2021, Sen. Bill Cassidy said 80% of the state’s policyholders would see increases to their premiums in the first year, with increases limited to 18% per year.

”They by law can only raise it 18%. But they can raise it 18% next year, 18% next year, 18% next year, 18% next year,” emphasized Kennedy. “And I think they’re gonna do that. And they keep telling me, ‘Well, there are some people who are seeing their premiums go down.’ And my response is, ‘Will you introduce me to them? Because I haven’t talked to anybody in Louisiana whose premiums went down.’ You know, it’s just a mess, and we’ve got a lot of problems that can’t be solved, but this is one that can be solved.”

However, Kennedy says FEMA will not release the new formula used to calculate premiums to Congress for review, and some legislators, like himself and Cassidy, are looking to FEMA to provide more transparency. In March, Cassidy sponsored the Flood Insurance Pricing Transparency Act.

“I just don’t think that the science has developed to the point that anyone can look out over 50 years. I think that the president and FEMA are using this as an excuse to raise premiums. I just do,” explained Kennedy. “And I haven’t seen - I’ll take that back if they’ll show me the evidence to the contrary. But they won’t show it to me.”

But, Kennedy says he does not believe the Senate has the votes to pass the legislation, citing opposition by President Biden.

“Well, a lot of the people that are opposed to making the change have political allegiance to President Biden. Not all of them, but some of them, they’re just gonna do whatever the - they happen to be Democrats, of course - they’re just gonna do whatever the president says,” said Kennedy. “There are other senators for whom flooding is not a major problem in their state, and so they’re not interested. Senators have a multitude of reasons for voting for or against something.”

Kennedy emphasized, though, that there is sometimes a poor perception of who the high premiums would impact in the state.

“We’re talking about working people,” said Kennedy. “Some people who don’t know Louisiana think that we’re talking about multimillion-dollar homes on the beach that have flooded a bunch of times or been blown down by a hurricane. That’s not true in Louisiana.”

Both of the state’s senators have emphasized to Congress that the rating system would have more than just an impact on how much a resident pays for flood insurance, though. Hiked premiums would also have an impact on the value of residents’ homes.

“Someday you may want to sell it if you want to retire. If all of a sudden your flood insurance quadruples over a period of time, people are less likely to buy your home, so the value of your home goes down,” explained Kennedy. “Therefore the value of your equity goes down. I mean it’s a multi-layered problem.”

Meanwhile, homeowner insurance companies continue to leave the state, with the state’s insurance company, Citizens Property, expected to grow from 35,000 to 95,000 policyholders this year.

All this while Louisiana residents hope for a quiet hurricane season.

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