Louisiana and nine other state filed a lawsuit Thursday against the federal government to block the sharp increases to rates for national flood insurance, which are scheduled to be phased-in over the next few years. They claim that the higher price could cost people their homes.
The lawsuit was filed at the U.S. District Court in New Orleans by a number of Louisiana local governments and districts that control floods. The Department of Homeland Security, the Federal Emergency Management Agency and other defendants are also named.
At a press conference held Thursday morning, Louisiana Attorney General Jeff Landry was joined by several local officials and leaders of business to announce the lawsuit.
FEMA says its new premium system incorporates data not used before, such as scientific models and the costs of rebuilding a house. The agency said that the old system could lead to people with lower-valued houses paying more than their fair share, while those with higher value homes paid relatively less.
Louisiana officials, however, have complained for months that the upcoming rate hikes could put an impossible financial burden on some residents of the state.
The annual increase is limited to 18%. When they are fully implemented some residents will pay significantly more.
The Times-Picayune/The New Orleans Advocate conducted an April rate analysis in Louisiana and found that the average increase was 134%. Officials have pointed out that some individuals will face a tenfold increase in their annual rates, even if they have never had a flood.
St. Charles Parish officials stated that the cost of policies for flood insurance will rise from $815 annually to $2,766.
State and local officials complained again at the Thursday news conference that federal officials refused to disclose methodology and data used for calculating the new rates. They also said that the new rates do not take into consideration individual flood mitigation efforts by homeowners, such as raising their houses, or local government’s construction of levees, and other flood protection methods.
Landry stated that high rates may drive people out of their homes, cause foreclosures, and lead to Louisiana losing population. Landry said that Louisiana needs affordable, reliable insurance rates to grow and prosper.
Landry’s Office has also listed Florida, Idaho Kentucky, Mississippi, Montana North Dakota, South Carolina Texas and Virginia as plaintiffs. Louisiana’s Solicitor-General Elizabeth Murrill stated that the issue is not limited to coastal areas, despite its profound impact on our coastal communities. It impacts communities that are working. Anyone who lives near the water is affected.
FEMA declined to comment via email, citing its policy not to comment on litigation that is pending.