Budget Battles Put Federal Flood Insurance At Risk. Louisiana Leaders Want To Change That.

WASHINGTON – Louisiana House members from both parties have teamed up with a Mississippi Republican to try to keep flood insurance from expiring on September 30.

Legislation filed Monday would add more than a year to the life of the program that provides insurance for damage from rising waters — policies that financial institutions require many property owners to buy before agreeing to lend mortgage money.

Filing the bill were Democratic Reps. Troy Carter, of New Orleans, and Cleo Fields, of Baton Rouge; Republican member Julia Letlow, whose northeast Louisiana-based district includes some neighborhoods in the Baton Rouge; and GOP Rep. Mike Ezell, whose Mississippi congressional district represents that state's populous Gulf Coast.

The House legislation is a companion to a similar measure filed by Louisiana's two U.S. Senators, both Republicans, Bill Cassidy, of Baton Rouge, and John N. Kennedy, of Madisonville.

Louisiana property owners held about 400,000 food insurance policies as of the end of March, according to FEMA.

The authority for the Federal Emergency Management Agency to oversee the sale of flood insurance policies expired last year. Extensions have been attached to the resolutions that maintain funding for the government.

In fact, during the past decade, Congress had to pass 33 short-term authorization extensions to keep the National Flood Insurance Program operating. Had Congress failed to pass any of the contentious government funding bills — several times they have come within hours of it — it would halt flood insurance policies from being issued or renewed, which in turn could shut down real estate actions.

According to the National Association of Realtors, a lapse of NFIP could impact 1,360 home sale closings daily, translating to approximately 41,300 affected monthly transactions nationwide.

Meanwhile, Homeland Security Secretary Kristi Noem has said she wants to close FEMA and move many of its major functions to state governments. FEMA has moved to lay off personnel and has ended one pre-disaster mitigation grant program and paused taking applications for another.

Noem heads a presidential task force with an eye on recommending changes to FEMA's operations, funding, duties and mission.

Carter said this bill would lock in FEMA's National Flood Insurance Program through 2026 without further legislative action needed. Should both chambers of Congress approve the bill, and President Donald Trump sign it, flood insurance would remain operational while Congress works to "strengthen and modernize" the program.

Carter added the bill is a straight-up reauthorization that would allow "uninterrupted access to flood insurance across the country."

"Given our state's history with extreme weather events, we must ensure that flood insurance remains accessible to all," Fields said.

Ezell, R-Pascagoula, said passage of the act would deliver stability in communities that are being impacted more and more by severe weather.

"For far too long, families, businesses, and entire communities along our coast have lived with the uncertainty caused by short-term extensions of the National Flood Insurance Program," Ezell said.

Louisiana leaders praised the idea.

"A two-year reauthorization will provide a runway for Congress and stakeholders to hold conversations and hearings around catastrophic insurance and towards highly-demanded comprehensive NFIP reform, like a means-tested benefit for affordability, a third-party review of the Risk Rating 2.0 methodology, and proper incentivization of flood risk mitigation," said Michael Hecht, president of New Orleans business and economic development organization GNO Inc.

In Risk Rating 2.0, Hecht is referring to the new premium-setting system Congress wanted FEMA to implement. Taxpayers have to pick up the costs when the flood insurance funds are exhausted.

The goal of Risk Rating 2.0 is to better align the cost of policies with the covered property's likelihood of flooding. Those rates have been lower for many policyholders, but are significantly higher for others in closer to the Gulf Coast — including many in Louisiana.

"For many Louisianans, flood insurance is not just a policy—it's a lifeline," Letlow said in a statement. "Given the frequent storms and flooding our state endures, I'm a strong advocate for renewing the National Flood Insurance Program and making sure it serves those who depend on it."

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