Louisiana joins lawsuit to block flood insurance hike

NEW ORLEANS (AP) — Louisiana’s Department of Insurance has joined a lawsuit filed by Mississippi against the federal government

to try to block rates from increasing Oct. 1 in the National Flood Insurance Program.

Commissioner Jim Donelon said Wednesday that the department had filed an “amicus curiae, or friend of the court” brief in

Mississippi’s lawsuit.

Donelon said the proposed increases under the Biggert-Waters Flood Insurance Reform Act could be devastating for south Louisiana


“The changes to the federal flood program will disproportionately affect policyholders along Louisiana’s working coast. Placing

the bulk of the flood insurance burden on these hardworking homeowners is not only financially burdensome but unjust,” he


In September, Mississippi sued and

asked a federal judge to find that the Federal Emergency Management

Agency was obligated

to deliver an affordability study to Congress by this past April

but had failed to do so. About 17.4 million households in

the U.S. live in areas where flood insurance is mandatory, and 41

percent of those have low to median income levels, the lawsuit

says. The suit asks the judge to block rate increases until FEMA

has done everything the law requires.

The Biggert-Waters Act removes federal subsidies from properties in flood zones. FEMA says the phase-out of subsidies will

affect fewer than 20 percent of flood policyholders nationwide.

In Mississippi, 14 percent of flood insurance policies are subsidized, according to the NFIP. Louisiana flood policyholders

currently pay more than $360 million in premium to the NFIP, which is the third most premium in the nation, after Florida

and Texas. As of Sept. 30, there were about 483,000 NFIP policies in force in Louisiana.

The 2012 law was intended to keep the

flood insurance program solvent after a large number of claims following


Katrina and Rita, which struck in 2005. It reauthorized the flood

insurance program for five years and set a strategy for

updating flood zone maps across the U.S. The Mississippi lawsuit

says that according to FEMA, Mississippi and Louisiana are

the first states to include post-Katrina statistics in their

rating methodology.

“This means that Mississippi’s citizens will be among the first in the nation to have these drastic rate increases imposed,

and that Mississippi’s citizens will pay for them many years before citizens of other states are required to do likewise,”

the lawsuit says.

Louisiana joins Florida, Alabama, South Carolina and Massachusetts in filing amicus briefs in the Mississippi lawsuit.

Louisiana’s brief also states that many residents received FEMA grants and other benefits following Katrina, conditioned in

part upon their continued participation in the NFIP.

At the time they did so, the NFIP rates were reasonable and were anticipated to remain so. Moreover, those that rebuilt did

so in compliance with then-applicable Base Flood Elevations, the document states.

“If flood insurance premiums escalate

beyond affordability because of the Biggert-Waters Act, the recipients

of such grants

and other grants may be subjected to adverse action by FEMA or

their lenders over which they have no practical control,” the

brief said.

The suit also states that in some circumstances, the new flood insurance rates will result in an unconstitutional taking of


After Katrina and Rita, many rebuilt

properties to the Base Flood Elevations then in effect. “Remapping

pursuant to the Biggert-Waters

Act has resulted in significant increases to the BFEs and, as a

result, many homes and businesses built at or over the BFEs

that were then in effect are now several feet below the new BFE

levels,” the brief said.

“This results in properties being

subject to drastic increases in flood insurance premiums even though

they were built in

compliance with the Base Flood Elevations in effect at the time,”

Donelon said. “Many properties have already begun to lose

value and will become challenging, if not impossible, to sell. We

feel that the devaluation of homes due to these changes

is a de facto taking of people’s property value without due