Cassidy urges congress to make flood insurance affordable this hurricane season

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U.S. Senator Bill Cassidy, M.D. (R-LA) today delivered a speech on the U.S. Senate floor demanding Congress take action to make the National Flood Insurance Program (NFIP) affordable as Louisianans wade through another hurricane season. Cassidy highlighted the uncertainty NFIP’s new risk assessment system, Risk Rating 2.0, has caused homeowners who do not know if they can afford rising premiums. This is the fourth installment of a series of Senate floor speeches Cassidy is using to focus attention on flood insurance costs.


“NFIP is a safety net for homeowners after a storm. It protects them from being financially wiped out by a hurricane,” said Dr. Cassidy. “However, this year is different from past years for two reasons. First, the National Weather Service predicts that 2024 will see ‘above-normal’ hurricane activity in the Atlantic and Gulf of Mexico. Second, there is much more uncertainty about whether NFIP will remain affordable.”

“These aren’t millionaires’ beach homes. These are hard-working folks who are uncertain whether they will be able to stay in their home because of a decision made with zero input from Congress,” continued Dr. Cassidy.

“Every single member of this body has constituents who rely on the National Flood Insurance Program,” concluded Dr. Cassidy. “We owe it to them to find a solution to a system that isn’t working.”


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 August to talk with residents about their flood insurance premiums, resulting in the second episode of his series Bill on the Hill.


Cassidy’s speech as prepared can be found below:

Madame President, 

I am here again to talk about flood insurance and the uncertainty many homeowners are feeling heading into hurricane season this summer.


In Louisiana, we take hurricane season seriously. 

Folks back home are hopeful that we make it through without seeing a major storm reaching our coast.

But while we’re hopeful, we’re also prepared. 


And we know that our neighbors will always be there to support one another if we are faced with another major hurricane this year.

But in the back of our minds, we need to think about how we rebuild after a hurricane sweeps through our community.

That is why we have the National Flood Insurance Program—or NFIP for short.


NFIP is a safety net for homeowners after a storm. It protects them from being financially wiped out by a hurricane.

However, this year is different from past years for two reasons.

First, the National Weather Service predicts that 2024 will see “above-normal” hurricane activity in the Atlantic and Gulf of Mexico.


Second, there is much more uncertainty about whether NFIP will remain affordable due to FEMA’s new risk assessment system—Risk Rating 2.0.

For most people, the short answer is no. 

Flood insurance is becoming less affordable year after year.


But this is not just an issue affecting Louisiana. 

Risk Rating 2.0 affects all coasts and any place where there is a river or a stream.

Anywhere there is water there is a risk of flooding.


NFIP covers 4.7 million policies across the country. 

Millions of Americans rely on NFIP to insure their homes and businesses, and ultimately to keep their family safe.

And we’ve seen flooding in states that don’t typically make you think “flooding”.


Virginia, Missouri, North Carolina, South Carolina, New York, New Jersey, Florida, Alabama, Mississippi, Pennsylvania, Texas, California, and Louisiana are all states that have had more than one billion in NFIP claims since 1978. Let me say that again, one billion dollars in NFIP claims. 

And those are just the states that have been hit the hardest in dark yellow.

44 states have had over fifty million in total NFIP claims, and every single state has had at least five million in claims.


When we look at the total damage, the numbers become even worse.

In the past three years, we have seen seven major flooding events across the country that have cost more than 1 billion dollars each.

In 2021, Louisiana saw flash flooding that affected thousands of homes.


California has had two major floods—in January of 2021 and in the winter of 2023.

Kentucky and Missouri both saw major flooding in July 2022.

Florida in April 2023. 


Vermont, New York, Wisconsin, Minnesota, and Illinois were each hit in July 2023.

And in December of 2023, we saw flooding along the East Coast states from Florida to Maine.

Remember, those are just the floods that have caused over 1 billion dollars in damage.


And when we consider who lives in the areas most affected, we see why we need to keep NFIP affordable for working families.

62 percent of all NFIP policies are in parishes and counties where the median household income is below the national average of about $54 thousand.

These aren’t millionaires’ beach homes. 


These are hard-working folks who are uncertain whether they will be able to stay in their home because of a decision made with zero input from Congress.

Now we are seeing the consequences of that decision with an estimated 900 thousand people—or one-fifth of all policies—dropping their coverage because it’s unaffordable.

When that happens, the pool of policyholders shrinks, and the program enters what’s called an actuarial death spiral.


We are setting the program up for collapse. 

Congress needs to do something before it’s too late.

First, we need to take a step back and ask how we got into this situation.


Why did FEMA implement Risk Rating 2.0?

Why inject this much uncertainty into the system?

Congress never passed a bill requiring that FEMA implement this.


President Biden could have stopped it with a stroke of a pen.

We’ve done it in the past. 

In 2019, my office worked with the Trump administration to successfully delay implementation because of concerns over the methodology of how FEMA was calculating rates.


This time, even though the concerns remain, the Biden administration did not work with us.

Since the Biden administration allowed this to happen, Congress must step in.

My team is working on a bipartisan solution that will roll back Risk Rating 2.0, and make flood insurance affordable and accountable again.


Let me say to my colleagues: come talk to me about it. Let’s have a conversation.

Every single member of this body has constituents who rely on the National Flood Insurance Program.

We owe it to them to find a solution to a system that isn’t working for Americans who were promised a safety net in case of a flood.


Let’s get to work.

With that, I yield back.