NEW ORLEANS (AP) — Increases in federal flood insurance premiums that are projected to surpass 700% over the coming years are already leading people to back out of home purchases and will likely lead to an exodus of residents and businesses from southern Louisiana, officials told a federal judge Thursday in New Orleans.
The testimony came in a hearing in a lawsuit Louisiana and nine other states filed against the federal government to block sharp increases in national flood insurance rates. A phase-in of the new rates began in 2021. Annual increases are limited to 18%. The Federal Emergency Management Agency said the new method of computing rates has resulted in reductions or little or no increase for most policy holders.
But FEMA figures also show huge impending increases in some Louisiana ZIP codes. State and local officials who testified Thursday said the increases are expected to result in some people in working-class southern Louisiana to abandon their mortgages, try to sell homes that have been in families for generations, or drop their insurance.