Vol. 39: Fixing Flood Insurance for Louisiana – and the Nation
In recent weeks GNO, Inc. has organized a broad coalition of elected and business leaders to address drastic – and unintended – increases to National Flood Insurance Program (NFIP) rates for Louisiana home and business owners. A confluence of the Biggert-Waters Act of 2012 (meant to stabilize NFIP), incomplete FEMA maps and questionable actuarial calculations has led to premium increases of up to 5,000% and more – for policy-owners who have never flooded.
- A home in Belle Chasse will go from $633 to $28,544
- A home is St. Charles will go from $388 to $23,946
- A business in Slidell will go from $5,698 to $53,662
Again, these are for owners who built to FEMA code, and have never flooded. They have done nothing wrong.
If unchecked, the consequences for Louisiana are clear, and devastating. Owners will not be able to afford insurance, homes will not be viable, and the ripple effect will shut down the economy. Ironically, this would ultimately destroy NFIP, itself, as policyholders leave the unaffordable program in droves.
Clearly, this cannot stand.
The challenge, however, is not limited to Louisiana. All 50 states in the US participate in NFIP. Louisiana, in fact, is only fifth in the country in terms of financial exposure to flooding: behind Florida, New York, New Jersey, and Virginia. So, the threat from runaway NFIP rates is to all of America.
The good news is that the response from our Louisiana Congressional delegation has been swift; significant credit is due to our elected officials in DC who have made this issue a top priority. With their leadership in both the House and Senate, we are in a strong position to solve a problem that must be resolved: ensuring a sustainable, actuarially responsible NFIP – that does not eviscerate economies and owners.
GNO, Inc., and local officials are now working with over 20 states on a national response, as part of our new Coalition for Sustainable Insurance (CSFI). When we fix national flood insurance it will be not only for Louisiana, but the nation, as well.
President and CEO
Greater New Orleans, Inc.