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Insurance costs could soar for some Louisiana residents under FEMA's 'Risk Rating 2.0'

"In Louisiana, 80% of policy holders will have an increase in the first year," Sen. Cassidy said.

NEW ORLEANS — Laura, Delta, Zeta, Ida. Southern Louisiana has seen its fair share of storms over the past two years. As people continue to clean up, there's now another concern.

A new system for setting flood insurance rates is getting some pushback from lawmakers. They argue FEMA's new plan, Risk Rating 2.0, will hike up premiums for hundreds-of-thousands of people.

"And it's clear," Sen. Bill Cassidy (R) said. "For some, premiums will become unaffordable and will collapse the value of their home."

It's called "Risk Rating 2.0." FEMA says the annual payment is now based specifically on a person's property instead of the area. Meaning rates will be determined on how likely their home will flood and how much it would cost to fix it. FEMA says its new plan will decrease the annual flood insurance cost to more than a million homeowners nationwide. However, Louisiana, could see the opposite.

"In Louisiana, 80% of policy holders will have an increase in the first year," Sen. Cassidy said. "There's an example of a person in Lake Charles that does not live in a flood zone, pays $572 on a single-family home worth $250,000, and the quote he's received raises his policy tenfold to over $5,000."

According to FEMA, a homeowner with an existing policy, should see an initial yearly increase of about $120. That fee will begin April 2022. It's unclear though, how much they'll pay annually after. For those seeking a new policy, the new fee has already begun. 

Lawmakers want more information from FEMA, which they say has given few details. Southwest Louisiana Congressman Clay Higgins addressed that with the FEMA administrator Tuesday during a committee meeting.

"Can we get a commitment that FEMA will consider delaying implementation of Risk Rating 2.0 until we get solid answers of realities of what it means for citizens who carry flood insurance policies?" he asked.

"Congressman, we can get back to you with specific information, but Risk Rating 2.0 has been implemented and already individuals are seeing decreases in rates, which is the first time this program has taken equity into account to make sure people are paying for the risk that they have," replied FEMA Administrator, Deanne Criswell.

Some argue though, only time will tell.

Again, those who already have a policy in place will see their new rate go into effect starting April 2022. For those seeking new policies, the new rate went into effect last Friday.