WASHINGTON – U.S. Senator Bill Cassidy, M.D. (R-LA) today demanded answers from the Biden administration and the Federal Emergency Management Agency (FEMA) on Risk Rating 2.0, the National Flood Insurance Program’s (NFIP) new risk rating system that will raise insurance premiums on 80% of Louisianans in the first year.
“FEMA’s plan to implement the program first and provide details later is causing havoc. It has left policyholders in the dark without the basic information they need to prepare for the future,” said Dr. Cassidy. “Concerned constituents are contacting my office daily in dire need of clarity FEMA is not providing.”
“We know Risk Rating 2.0 will hurt millions of Americans. Withholding the true damage that is set to befall them will only make things worse,” concluded Dr. Cassidy.
Read the full letter here or below.
Dear Administrator Criswell:
As I have written previously, I oppose FEMA’s Risk Rating 2.0 rate hikes, and ask President Biden to roll back this flawed program. However, until this is done, I write to get clarity on several major issues emerging from the haphazard implementation of Risk Rating 2.0.
FEMA’s plan to implement the program first and provide details later is causing havoc. It has left policyholders in the dark without the basic information they need to prepare for the future. Insurance agents in my state tell me that FEMA has not given them the information they need to adequately assist policyholders in navigating the changes to the program. This uncertainty is damaging and inexcusable. Despite years to plan the rollout of Risk Rating 2.0, FEMA is not meeting its basic obligations to serve my constituents.
In the past, agents could tell policyholders how much elevating their home, or making other improvements, would reduce their flood insurance rates. This encouraged mitigation, protected property and ultimately saved the National Flood Insurance Program (NFIP) money.
Today, this information is not available under Risk Rating 2.0. If you are building a new home, you need to know how high to elevate to receive a flood insurance premium you can afford. This is a serious problem for new home construction market, as homebuilders don’t know what metrics to target. It also affects current policyholders who cannot make plans to address the coming rate hikes as they don’t know what FEMA will accept for mitigation.
In general, FEMA needs to be more transparent and more responsive to information requests from Congress and the public. After we learned through the nonpartisan Congressional Budget Office (CBO) that FEMA internally projects that as many as 900,000 policyholders will drop their insurance coverage as a result of Risk Rating 2.0, we asked your office on October 4th for a briefing. It has been over three weeks and we have not received a date for such a briefing. Concerned constituents are contacting my office daily in dire need of clarity FEMA is not providing.
Policyholders stand to see hundreds, and in many cases thousands, of dollars in annual premium increases over the next several years. FEMA is quick to advertise rates will only go up by $0-$10 per month for 66% of policyholders, but has not mentioned that this is only true for the first year of the program. In future years, policyholders in this group could see the same drastic premium increases. No one knows how much rates could go up or how many policyholders are impacted, because FEMA won’t release that information.
The lack of communication greatly diminishes any confidence in FEMA’s ability to implement this Risk Rating 2.0. If the Biden administration refuses to halt implementation of this disastrous policy, the least they can do is provide my constituents with the basic information they need to navigate this new rating regime. Home builders, insurance agents and families need to know how mitigation measures can influence their potential rates. FEMA must be transparent to Congress and our constituents about the true extent of these premium increases.
If FEMA only has bad news to share, then so be it. We know Risk Rating 2.0 will hurt millions of Americans. Withholding the true damage that is set to befall them will only make things worse. The wellbeing of these homeowners is more important than the potential embarrassment to this administration for carrying out this half-baked policy decision.
I hope to hear from you soon.
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