Sen. Kennedy discusses insurance issues for Louisiana residents

Alexandria, la. (KALB) – As flooding events and hurricane season reach their peak, like the heavy rains that hit Central Louisiana on Wednesday, August 24, lawmakers in Washington, D.C. and the state Capitol are working to prepare for the potential severe weather fallout.

News Channel 5 sat down with Sen. John Kennedy to talk about how extreme weather events are impacting the state, especially in regards to insurance, the crisis the state is currently facing.

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

As the state has received billions in disaster relief over the past five years after Hurricanes Laura, Delta and Ida, Louisiana legislators recognize the growing 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 coverage for all Americans under the National Flood Insurance Program.

These new calculations were made through an algorithm that determines premiums based on flood risk in those areas, both current risk and potential future risk.

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

Those premium changes began in April, affecting about 500,000 Louisiana policyholders, who make up 10% of 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 that higher prices will cut 1 million policies compared to the start of the decade.”

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

“They can only raise it 18% by law. But they can raise it 18% the next year, 18% the next year, 18% the next year, 18% the next year,” Kennedy insisted. “And I think they will. And they keep telling me, ‘Well, there are some people who are seeing their premiums go down.’ And my response is, ‘Would you introduce me to them? Because I haven’t talked to anyone in Louisiana whose premiums went down.’ You know, it’s just a mess, and we have a lot of problems that can’t be solved, but it 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 don’t think the science has developed enough to look beyond 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 — if they show me evidence to the contrary, I’ll take it back. But they won’t show me this.”

However, Kennedy said he did not believe the Senate had the votes to pass the legislation, citing opposition from President Biden.

“Well, a lot of people who are opposed to change have a political allegiance to President Biden. Not all of them, but some of them, they’ll do whatever — they might be Democrats, of course — they’ll do whatever the president says,” Kennedy said. “There are other senators for whom flooding is not a big problem in their state, and therefore they are not interested. Senators have many reasons to vote for or against something.”

Kennedy stressed, however, that sometimes the state has a poor understanding of who will be affected by higher premiums.

“We’re talking about working people,” Kennedy said. “Some people who don’t know Louisiana say we’re talking about multimillion-dollar homes on the beach that have been repeatedly flooded or blown away by hurricanes. That’s not true in Louisiana. “

Both state senators have stressed to Congress that the rating system only affects how much residents pay for flood insurance. Increased premiums will also impact the value of residents’ homes.

“Someday 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 your home’s value goes down,” Kennedy explained. “So the value of your equity goes down. I mean it’s a multi-level problem.”

Meanwhile, as homeowners insurance companies continue to leave the state, the state’s insurer, Citizens Property, is expected to grow from 35,000 to 95,000 policyholders this year.

Despite all this, Louisiana residents are hoping for a quiet hurricane season.

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