What FEMA Says About New Flood Insurance Rates for St. Tammany Residents
A Federal Emergency Management Agency (FEMA) official, Gilbert Giron, has addressed St. Tammany residents’ concerns regarding the huge increase in their flood insurance premiums. The spike in rates can be contributed to the “overhaul currently taking effect” with a complex new system. The official explained that for years Louisiana residents have been paying artificially low rates for years while the state has had a large amount of claims paid out.
“We are addressing that not just in Louisiana,” said Giron. “We’re addressing this in the entire country.”
This new system is called Risk Rating 2.0 and will take the place of FEMA’s maps for setting rates. The system will look at each property taking into consideration the individual characteristics basing the premium on each property. The change will bring FEMA’s national program up to date with how many in the private sector practices.
FEMA says that rate increases to existing policyholders will be phased and will be at a maximum of 18% per year. The increases will continue each year until the policyholder’s home reaches their full risk rate. Insurers and real estate agents in the state have already seen some premiums quadruple or more compared to what they saw with the old system.
Parish leaders are afraid of what these new rates will do to the housing market in Louisiana. The state has the most residents participating in the National Flood Insurance Program. The state and parish leaders want to be able to set a limit to increases but so far they have not been able to set a limit.
“We have people who are leaving because they simply can’t afford to live there anymore,” said Bonnie Peyroux, president of the homeowners association in the Moonraker Island subdivision.
Although FEMA officials have explained in detail the new system, residents still are taking the new rates hard. St. Tammany President Mike Cooper was thankful for FEMA’s presentation to St. Tammany residents, but this still does not put their concerns at ease.
“Last year when we were aware of this, there were too many unanswered questions,” Cooper said after the meeting. “And Congress has tried to intervene. Our local officials have met, other parish presidents have met. And we have asked Congress to intervene with FEMA.”
