Sen. Kennedy discusses the insurance problems of Louisiana residents

ALEXANDRIA, La. (KALB) – With flooding events like the one affecting Central Louisiana from heavy rainfall on Wednesday, August 24, and as hurricane season reaches its peak, lawmakers in Washington, D.C. and the state capital are working to prepare for the potential consequences of the weather. heavy.

News Channel 5 sat down with Senator John Kennedy to talk about how extreme weather events are really affecting the state, especially in regards to insurance, a crisis the state has been facing lately.

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

As the state has received billions in disaster aid over the past five years in the wake of Hurricanes Laura, Delta and Ida, Louisiana lawmakers recognize the increased importance of prioritizing mitigation efforts on the front lines.

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

These new calculations are made through an algorithm that determines premiums based on the risk of flooding in those areas, both current risk and potential future risk.

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

These premium changes began in April, affecting about 500,000 Louisiana policyholders, who make up 10% of those in the NFIP.

In a report by the Associated Press on July 22, 2022, FEMA “sent a report to the treasury secretary and a handful of congressional leaders saying the higher prices would cause a drop of 1 million policies compared to the start of the decade.”

Testifying before the Senate in September 2021, Senator Bill Cassidy said 80% of the state’s policyholders would see their premiums increase in the first year, with increases capped at 18% annually.

“By law, they can only increase it by 18%. But they can increase it 18% next year, 18% the next year, 18% the next year, 18% the next year,” Kennedy said. “And I think they will. And they keep telling me, ‘Well, there are some people who are seeing their premiums go down.’ And my answer is, ‘Will you introduce me to them? Because I haven’t talked to anyone in Louisiana whose premiums have gone down.’ You know, it’s just a mess, and we have a lot of problems that can’t be solved, but this is a problem that can be solved.”

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

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

But Kennedy says he doesn’t believe the Senate has the votes to pass the legislation, citing President Biden’s opposition.

“Well, a lot of people who are against change have political allegiance to President Biden. Not all of them, but some of them, they’re just going to do whatever they’re — they’re Democrats, of course — they’re just going to do whatever the president says,” Kennedy said. “There are other senators for whom the floods don’t are a major problem in their state, and so they’re not interested. Senators have a lot of reasons to vote for or against something.”

Kennedy pointed out, however, that there is sometimes a poor perception of who would be affected by higher premiums in the state.

“We’re talking about working people,” Kennedy said. “Some people who don’t know Louisiana think we’re talking about multi-million dollar beach houses that have flooded a few times or been blown down by a storm. That’s not true in Louisiana.”

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

“One day you might 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,” Kennedy explained. “Therefore the value of your capital decreases. I mean it’s a multi-layered problem.”

Meanwhile, homeowner insurance companies continue to leave the state, while the state-owned insurance company, Citizens Property, is expected to grow from 35,000 to 95,000 insured this year.

All this while Louisiana residents are hoping for a quiet hurricane season.

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