U.S. Senator Bill Cassidy (R-LA), along with Senators John Kennedy (R-LA), Cindy Hyde-Smith (R-MS), Roger Wicker (R-MS), Jim Justice (R-WV), Shelley Moore Capito (R-WV), Tommy Tuberville (R-AL), and John Cornyn (R-TX), has called on the Federal Emergency Management Agency (FEMA) to end the Risk Rating 2.0 policy for flood insurance premiums. The senators argue that this policy, introduced during the Biden administration, has led to significant increases in premiums and caused many homeowners to drop their coverage.
“In Louisiana and other flood-prone states, premium increases of well over 100 percent have forced tens of thousands of homeowners to drop coverage altogether,” wrote the senators.
“Each year Risk Rating 2.0 remains in place, participation continues to erode, the insurance pool weakens, and taxpayer exposure grows. Immediate action must be taken to stop the actuarial death spiral,” continued the senators.
In a letter addressed to Acting Administrator Evans, the senators referenced concerns they had previously raised about Risk Rating 2.0 under the National Flood Insurance Program (NFIP). They cited new data showing that since the implementation of Risk Rating 2.0, flood insurance premiums have increased across all states and approximately 77 percent of policyholders are now paying more than before. The letter notes that these premium hikes have led tens of thousands of homeowners in Louisiana and other high-risk areas to drop their policies, reflecting a nationwide decline in NFIP participation due to affordability issues.
The senators also pointed out findings from a December 2025 study published in the Journal of Catastrophe Risk and Resilience, which reported an 11–39 percent decrease in new NFIP policies and a 5–13 percent reduction in existing policies following premium increases under Risk Rating 2.0. The largest declines were seen in communities least able to handle repeated rate hikes.
They warned that reduced participation undermines the effectiveness of flood insurance by shrinking the risk pool, leading to higher premiums and greater volatility. As more homeowners become uninsured, reliance on post-disaster federal aid could increase, shifting costs from pre-disaster insurance models onto taxpayers.
The letter also criticized FEMA for not releasing detailed information about how it calculates premium increases or providing opportunities for external review. The senators argued that this lack of transparency prevents homeowners from understanding changes to their rates and hinders community planning efforts.
The group urged FEMA to take immediate steps to address these issues: “Time is of the essence. Each year Risk Rating 2.0 remains in place, participation continues to erode, the insurance pool weakens, and taxpayer exposure grows. Immediate action must be taken to stop the actuarial death spiral. We urge FEMA to act promptly to correct course and ensure the NFIP fulfills its core mission of protecting homeowners, communities, and federal taxpayers alike.”
