Bill Cassidy: “this is a theme I have been speaking of which affects States across the Nation, which is the National Flood Insurance…”

“this is a theme I have been speaking of which affects States across the Nation, which is the National Flood Insurance Program and the threat that it might lapse and the inability of families to be able to afford. Why are flood insurance premiums so high, you might ask? Flood insurance premiums have skyrocketed across the country due to FEMA's new risk assessment system, Risk Rating 2.0. At the heart of the problem of Risk Rating 2.0 is that with much higher premiums, people will quickly be unable to afford coverage and just drop their policies. It is well-known in the insurance actuarial world that when you increase a policy by a certain percent, there is going to be another percent of people who just drop their coverage. That means that the pool of policyholders shrinks, and the program enters into what is called an actuarial death spiral, which is to say the risk, instead of being spread out over many, is concentrated in increasingly fewer people, driving up their premiums even that much more; therefore, more people drop. If we do nothing, the National Flood Insurance Program will collapse. This is important. The National Flood Insurance Program covers 4.7 million American homes across the country. Now, clearly, I am concerned about Louisiana, as that is my State, but it is not just Louisiana or even just a coastal issue. Look at a map of those affected. The States in dark yellow have been hit the hardest by flooding.…”