Senators want Risk Rating 2.0 repealed to lower flood insurance premiums
LAFAYETTE, La. (KLFY) - Several U.S. senators, including Louisiana Senator Bill Cassidy, are asking for the Biden's Risk Rating 2.0 to be repealed due to wanting more transparent flood risk assessment and help to lower flood insurance premiums.
Cassidy, along with Senator John Kennedy and members from Texas, Mississippi, Alabama, and West Virginia, sent a letter to the Trump administration asking for Biden's Risk Rating 2.0 to be repealed.
"I have sent a letter urging the Trump administration to finally end Risk Rating 2.0 and make flood insurance affordable again," Cassidy. said
Cassidy pointed out that flood insurance plans under the federally backed National Flood Insurance Program (NFIP) have seen skyrocketing premiums.
"NFIP premiums have increased in every state," Cassidy said. "Seventy-seven percent of all NFIP policies pay more under this system than they did in the old system."
Risk Rating 2.0 changed the way NFIP assessed flood risk for properties. It focuses on individual properties, instead of zones. However, Louisiana Deputy Insurance Commissioner John Ford said the lack of transparency in the program has made oversight hard.
"We don't know if the risk is being assessed properly and there is no way to determine or challenge whether your insurance premium is accurate based on that," Ford said.
For this reason, Ford said he and the Insurance Commission agree Risk Rating 2.0 needs a second look.
"Our office and the commissioner completely agree that Risk Rating 2.0 has a major problem and that is the lack of transparency and how FEMA and NFIP are determining the risk for each property they're accessing," Ford said.
The majority of Louisiana residents with flood insurance plans are covered by the NFIP.
"It's about 90 percent of the market so roughly 9 out of every 10 Louisiana resident who have a flood policy have it through NFIP," Ford said.
Ford hopes these changes can be made at the federal level, since the Louisiana Department of Insurance has no regulatory power over the Federal program.
"It's important to have flood insurance if you're in Louisiana, so obviously we want to be doing everything we can to make sure flood insurance is properly priced and affordable for the people of Louisiana." Ford said.