Louisiana is joining nine other states in a lawsuit against the federal government over its new system for setting flood insurance rates, which is triggering steep hikes for homeowners, Attorney General Jeff Landry announced Thursday, calling the increases a “disaster of its own” that risks driving out families and businesses.
The lawsuit is the culmination of months of concerns raised by state and local officials over sweeping changes to the National Flood Insurance Program. Louisiana is projected to see increases of 134% on average for single-family homes, phased in over years.
Those in especially flood-prone areas are seeing much higher hikes, with Plaquemines Parish projected to be hit with the steepest in the state at 545% on average. Orleans is projected to see 99% increases, Jefferson 150% and St. Tammany 126%.
At the ZIP code level, the highest projected percentage increase in the nation is in Plaquemines Parish's 70082 ZIP code. That area will see average hikes of 1,098%, from the current $673 to an average annual premium of $8,058.
Premium increases are limited to 18% per year, but those hikes compound over time, adding up to substantial totals for many in Louisiana.
State Solicitor General Liz Murrill said the lawsuit alleges that the new premiums are being set in an “arbitrary and capricious” manner and accuses FEMA of violating a mandate to provide flood insurance coverage at reasonable rates.
Landry cited two residents’ dramatic increases, including one in Lafourche Parish seeing his premium climb from around $600 to more than $6,000.
Referring to the complex algorithm being used to set the new premiums, he alleged FEMA was employing “secret math formed by hypothetical events and some crystal-ball predictions.” Louisiana officials say their discussions with federal officials on their concerns have not yielded results.
“We’re now placing Louisiana families on a path to foreclosure regardless of race or economic means,” Landry said at a press conference in New Orleans at the offices of local economic development organization GNO Inc., which leads the national Coalition for Sustainable Flood Insurance. “Adding insult to injury, there's no rhyme or reason for these changes.”
Landry’s office said the lawsuit was filed on Thursday in federal court in New Orleans. Murrill said it seeks to force FEMA to revert to the former system for setting premiums, at least until another alternative can be developed.
The nine other states in the lawsuit are: Florida, Idaho, Kentucky, Mississippi, Montana, North Dakota, South Carolina, Texas and Virginia. A list of Louisiana parishes, municipalities and local authorities have also signed on as plaintiffs.
Defendants include FEMA, which oversees the NFIP, and the U.S. Department of Homeland Security as well as their leaders, according to Landry’s office.
Parish presidents from St. Charles, Terrebonne, Lafourche and St. Bernard were among those who joined Landry at the press conference. St. Charles is also suing FEMA separately, saying it has failed to respond to public records requests on how the rates are being set in the new system, known as Risk Rating 2.0.
Climate change denial
Opposition to the new rates is a rare issue uniting Louisianans across the political spectrum given how hard the state is being hit and the high risk of flooding here, and Landry, a leading Republican candidate for governor, is launching the legal bid months ahead of this year’s election. Murrill is running to replace him as attorney general.
But Landry also dodged a question over whether he still believed climate change to be a “hoax,” as he has said in the past. The effects of climate change, including sea level rise and the intensification of storms, is one factor driving the change in premiums.
“When we go through mitigation efforts, when our citizens pay taxes, when we build levees, when we install pumps, then the federal government should credit us for that,” Landry said. “And that's what you call protection, irrespective of what you want to maybe believe is causing any of these disasters. It doesn't matter. It's coming. We can either hide, or we can protect our citizens. And I think the federal government has a role in doing that as well.”
Republican gubernatorial candidate Jeff Landry speaks during a campaign forum, Wednesday April 26, 2023, at the Crowne Plaza Hotel in Baton Rouge, La.
FEMA, which declined comment on the lawsuit, says the new system is fairer for everyone because it calculates the risk of each individual home through a range of factors, including distance from water, construction type, ground elevation and rebuilding cost.
But there have been concerns over unintended consequences in Louisiana, where nearly everyone lives near water. Louisiana has the highest number of policies per capita with the NFIP.
There are also concerns over transparency in how the rates are being set, with Louisiana officials saying they don't believe levees and other flood protection measures are being appropriately accounted for. Much of the data being used to set rates is proprietary and not available publicly.
The aim of the changes is also to set rates on an actuarially sound basis and to help put the NFIP on a sustainable financial path, with the program in debt to the tune of $20.5 billion.
FEMA itself has proposed assistance to families struggling with the new rates through a program based on income, but it requires approval by Congress.
Louisiana’s congressional delegation has made a series of proposals aimed at blunting the impact of the rates, including lowering the cap on annual increases, but they have not gained enough traction at the national level.
Editor's note: This story was updated on June 1 with further details and background.