Risk Rating 2.0 is FEMA’s new pricing methodology for the National Flood Insurance Program (NFIP) and went into effect on April 1st. This is the first “major overhaul” of flood insurance rates in 50 years. Unfortunately, Louisiana will see an 80% or more increase in policy and rates. Coastal areas of major national economic significance, and key oil and gas production hubs like Southern Louisiana, could face significant affordability challenges, based on shared examples from policyholders and concerns communicated by insurance agents, real estate agents, homebuilders, bankers, and local officials. 
“GNO, Inc.’s Coalition for Sustainable Flood Insurance is requesting that information on this drastic change be clearly and widely communicated to the public,” said Michael Hecht, President & CEO of GNO, Inc. “We are already seeing extreme and inexplicable rate increases across our region, with policies that were $700 expected to skyrocket by as much as 200-300 percent, and in many cases much more, when they reach their full-risk rates. To penalize homeowners who have played by the rules and maintained their insurance is not a good policy – it is both morally unjust, and economically unwise.”
The Coalition for Sustainable Flood Insurance (CSFI) gathered parish presidents from all around the Greater New Orleans Region to discuss what this means for the area. CSFI has asked FEMA to be more transparent and engage with the public about how the process for Risk Rating 2.0 works. Immediate asks include a publicly accessible and digestible tool from FEMA for policyholders to understand rating factors’ weights and premium outputs. The Coalition is also working with members of Louisiana’s congressional delegation, as well as leadership in other states, to advocate for affordability provisions that will help make the program more sustainable for communities nationwide.
According to parish presidents throughout the Greater New Orleans Area, they are already seeing significant increases. People are unclear on how to calculate rates to determine the increase the new policy will have on the communities.
“Homeowners, businesses and renters in Jefferson Parish comprise over one-fifth of Louisiana’s flood insurance policyholders. As it stands, Risk Rating 2.0 will have devastating and unsustainable impacts on our citizens,” said Jefferson Parish President Cynthia Lee Sheng. “Since Hurricane Katrina, we have made significant strides to protect our residents, investing billions of dollars in extensive upgrades to our infrastructure and mitigation efforts. Although we understand the need for more equitable flood insurance premiums, more information about the changes and how they will impact residents long-term is needed.”
“Contrary to information provided by FEMA, Risk Rating 2.0 is anything but fair and equitable. This program will make people who have worked their whole lives to build and maintain their homes to turn in their keys,” said Archie P. Chaisson, III, Lafourche Parish President.
“St. Bernard Parish has made major investments in flood protection, with a new federal levee system and a new drainage millage passed by residents, allowing for an unprecedented comeback story following Hurricane Katrina,” said St. Bernard Parish President Guy McInnis. “Such investments should be recognized and built upon, and residents should be rewarded, not penalized.”
“FEMA’s Risk Rating 2.0 puts an unbearable financial burden on homeowners,” said St. Charles Parish President Matthew Jewell. “They are moving the goal post on homeowners who have previously built to their standards and now this new policy will price people out of Southeast Louisiana. FEMA needs to reverse this policy and with local leaders to implement a policy that maintains affordability.”
“The new FEMA Risk Rating 2.0 could not come at a worse time for Louisiana,” said Parish President Jaclyn Hotard. “Residents who were devastated by Hurricane Ida and other disasters have been through enough and do not deserve to be victimized again. It is a must that there is significant NFIP reform now, and I support all of our regional leaders in this collective pushback of harmful rate increases.”
“In Southeast Louisiana, affordable flood insurance rates are a necessity and I will take every available step to ensure that our citizens are protected,” said St. Tammany Parish President Mike Cooper. “An inconsistent and unfair increase to our neighbors’ flood insurance rates could price them out of their homes. I look forward to working with Congressman Scalise, legislators, fellow elected officials and providers to safeguard the future of our citizens.”
“Hurricane Ida, and the 2016 Louisiana Floods, demonstrate the value of flood insurance to higher-elevated communities like ours, and the ability of our communities to rebound from major flood events,” said Robby Miller, President of Tangipahoa Parish. “The continued growth and prosperity of Tangipahoa Parish, home to many communities steadily gaining population, should not be threatened by administrative decisions on a federal level. We support smart reform of the program to encourage adoption of flood insurance, and not discourage investment in new construction, for the wellbeing of our workforce and employers.”
“Flood insurance a critical program, not only for us in Louisiana, but for states all across the country. We need an affordable, equitable, transparent, and reliable program that will offer our families and businesses stability,” said Gordon Dove, Terrebonne Parish President. “We have been investing in risk reduction efforts doing our part so that we can continue to produce the energy, seafood, and host of other products we provide to people across the nation. The National Flood Insurance Program needs to recognize those efforts and work with us toward these shared benefits.”
“The significant premium increases that hundreds of thousands of Louisiana policyholders will see under Risk Rating 2.0 may lead to a lot of folks dropping their flood insurance altogether,” said Insurance Commissioner Jim Donelon. “Many property owners are still dealing with the major expense of rebuilding from the four hurricanes that hit our state in 2020 and 2021, so it’s important that the NFIP be mindful of the stresses policyholders on our ‘working coast’ are facing in these challenging times.”
Greater New Orleans Inc. which leads CSFI has around 250 organizations in 35 states. CSFI began in 2013 as a reaction to the Biggert-Waters Act and was also the catalyst for the Homeowner Flood Insurance Affordability Act (HFIAA).
