WASHINGTON – U.S. Senator Bill Cassidy, M.D. (R-LA) delivered a speech on the U.S. Senate floor highlighting his new report detailing the current state of the National Flood Insurance Program (NFIP) and the issues that led to skyrocketing premiums for millions of homeowners. The report explains the historical developments that led NFIP to this moment, key findings following a thorough examination of the crisis, and next steps Washington must take. Cassidy will also demand that Congress reform NFIP to make it affordable again.
“Skyrocketing insurance premiums caused by FEMA’s new risk assessment program—Risk Rating 2.0—have left many Louisiana families and families around the nation with no way to protect their homes,” said Dr. Cassidy. “That is what motivated me and my team to release a detailed report, breaking down the current state of NFIP, how it reached this point, and what Congress must do to make flood insurance affordable again.”
“These findings reflect why the American People overwhelmingly voted for change. The status quo is unacceptable,” continued Dr. Cassidy.
Background
In January, the U.S. Senate Banking Committee held a hearing on NFIP at the request of Cassidy. The hearing highlighted the urgent need for Congress to act and featured a Louisiana witness. Cassidy also participated in a roundtable hosted by GNO, Inc. and the Coalition for Sustainable Flood Insurance before introducing the bill to hear from community leaders and advocates on the issue.
Cassidy traveled St. Bernard Parish last year to talk with residents about their flood insurance premiums, resulting in the second episode of his series Bill on the Hill.
Over the last several months, Cassidy has delivered a series of speeches on the Senate floor calling for action on NFIP. Most recently, he demanded that Congress reauthorize and reform the program just before its authorization expired at the end of the fiscal year on September 30th.
Cassidy’s remarks as prepared for delivery are below:
Madam President,
We just had an election two weeks ago.
I am not here to lord it over anyone, but it is an important observation that Americans let their voices be heard overwhelmingly in one direction.
They voted for Republicans and voted against the status quo.
Americans in my state feel as though their government is not serving them the way it should.
They are struggling to afford trips to the grocery store, struggling to afford energy bills, and struggling to afford flood insurance.
For over 50 years, Americans have relied on the National Flood Insurance Program—or NFIP—to be a safety net in case of a disaster.
NFIP covers 4.7 million homes across the country—including families like those in LaPlace, Louisiana pictured here.
It is often the only flood insurance option for many communities.
However, the program is not serving Americans the way it should.
Skyrocketing insurance premiums caused by FEMA’s new risk assessment program—Risk Rating 2.0—have left many Louisiana families and families around the nation with no way to protect their homes.
Risk Rating 2.0 makes flood insurance unaffordable and puts the entire program at financial risk.
Despite Congress never approving Risk Rating 2.0, it unfairly jacks up rates, driving people to drop their coverage.
I hear a similar story from constituents in South Louisiana constantly.
That is what motivated me and my team to release a detailed report, breaking down the current state of NFIP, how it reached this point, and what Congress must do to make flood insurance affordable again.
What we found confirmed what Louisianans and Americans across the country already know—the National Flood Insurance Program is broken.
Our goal should be a program that is affordable, accountable, and sustainable.
Instead, FEMA has created a program that is unaffordable and going bankrupt as it forces Americans to drop coverage.
After storms like Hurricane Helene—which showed us that flooding is not just a coastal issue—we should listen to the American People when they say they are not OK with the status quo.
So, let’s take a look at what is in the report.
I’ll warn you—it’s not good news, but there are reasons to be hopeful.
First, we found that the average flood insurance cost in every state rose following Risk Rating 2.0.
That was true for 80 percent of Louisiana policyholders who saw a spike in their insurance premiums in the first year.
Second, NFIP premiums in Louisiana increased by 234 percent, resulting in 52 thousand Louisianians dropping their policies just last year alone.
That’s 52 THOUSAND Louisiana homeowners in just one year.
But again, it’s not just Louisiana.
Nearly half a million Americans nationwide have dropped their coverage.
Third, FEMA itself now predicts that up to one million policyholders nationwide could lose their flood insurance coverage in the next decade.
They admit their own policy will have devastating effects.
Yet FEMA still refuses to be transparent as to how they are calculating premiums.
That lack of transparency with Risk Rating 2.0 has left policyholders in the dark.
This was the reason we pushed to delay the program’s implementation when it was first announced—and we saw success under President Trump.
In 2019, my office worked with the Trump administration to successfully delay Risk Rating 2.0 because of the lack of transparency on how FEMA was calculating rates.
But when the Biden administration took power, they allowed Risk Rating 2.0 to move forward even though our concerns were never addressed.
The end result is homeowners are hit with high premiums with no explanation.
A fourth key finding was as we investigated NFIP and the lawsuits against Risk Rating 2.0 continued, it became clear that FEMA never had the authority to implement Risk Rating 2.0 without Congressional approval.
They never consulted us. We never passed it.
They went around Congress and their explanation for doing so is rather flimsy.
It’s like when you catch your child doing something they know they shouldn’t be doing.
Risk Rating 2.0 didn’t even adhere to the proper procedure for rulemaking in the executive branch.
Risk Rating 2.0 runs counter to what Congress intended, and FEMA had no right to do what they did.
These are four key findings of the report:
One, that premiums rose in every state.
Two, that they rose astronomically in places like Louisiana.
Three, that up to a million policyholders will drop their coverage because it’s too expensive.
And four, that FEMA side-stepped Congress to implement this without authority.
These findings reflect why the American People overwhelmingly voted for change.
The status quo is unacceptable.
NFIP is in desperate need of reform. It’s needed reform for years.
And now Republicans have an opportunity to finally listen to the American People on this issue.
Being too afraid to touch certain political issues serves politicians well, but only sets the American People back.
Enough is enough.
NFIP affects every single state.
The states in dark yellow have been hit the hardest by flooding and have relied on NFIP the most.
They have all had more than one billion in NFIP claims since 1978.
The 44 states have had over fifty million in total NFIP claims.
To put it simply, this is a national issue.
My message to my colleagues who represent states that rely on the National Flood Insurance program is let’s find a way forward.
We know what the next steps must be.
Congress must pass a comprehensive NFIP reform package that protects families from excessive premium hikes, strengthens mitigation efforts, and simplifies the claims process by cutting red tape.
FEMA must reevaluate its pricing methodology and focus on affordability again—just as Congress originally intended.
FEMA must roll back Risk Rating 2.0, and we must ensure FEMA does not go rogue without Congressional approval again.
And we must demand FEMA listens to the feedback from state and local stakeholders.
I have a plan to make flood insurance affordable for all Americans, and I’m encouraging my colleagues to join me.
Let’s end the status quo.
With that, I yield.
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