Rising insurance costs point to rising flood risk for Lafayette

The gist: Rising flood insurance costs under FEMA’s new Risk Rating 2.0 system are pushing up costs for Lafayette homeowners. But the rising rates belie a largely unseen level of risk. 

More than 20% of homes in the parish face at least major risk of flooding in the next 30 years, according to data from the First Street Foundation’s Flood Factor model. 

Get caught up, quickly: A new regime for pricing flood insurance — the hotly contested Risk Rating 2.0 — calculates premiums on an individualized basis, doing away with flood maps in a bid to right-size the beleaguered National Flood Insurance Program. Intended to more accurately assess the cost of flooding, the new calculations will drive up the cost of living in flood prone areas like much of South Louisiana. 

First Street’s model aims to gauge the cumulative flood risk of individual properties, similar to FEMA’s Risk Rating 2.0 system, though Risk Rating 2.0’s methodology hasn’t been released so the extent of the similarities is unclear. 

A home at risk of flooding in a 100-year storm would have a 1% annual chance of being flooded, but that risk accumulates to a 26% chance of flooding across a span of 30 years, which the Flood Factor model categorizes as moderate risk.

Storm Recurrence Annual Probability30-year Cumulative Risk
500 years0.2%5.8%
100 years1%26%
50 years2%45.5%
20 years5%78.5%
10 years10%95.8%
5 years20%99.9%

The result is that 22% of houses in the parish have at least an 80% chance of flooding in the next 30 years, which First Street categorizes as major flood risk. Conversely, the majority of homes in the parish, some 66%, face minimal flood risk of less than 6% over 30 years, according to the Flood Factor model. 

Higher risk properties are concentrated in rural western areas, recently growing areas around Youngsville and dense urban areas on Lafayette’s northside.

That distribution somewhat aligns with the expected costs of flood insurance under FEMA’s Risk Rating 2.0 system, which will see some of the parish’s highest rates concentrated in growing areas like Maurice and Youngsville, as well as Lafayette’s Northside and its areas along the Vermilion River. 

FEMA predicts average premium costs will be over $1,000 a year for nine of Lafayette’s 10 ZIP Codes, though prices will be higher for areas south of Johnston Street, particularly 70503, which runs between Johnston Street and the Vermilion River and is expected to see premiums on average rise to just under $1,900. 

Those increases are capped at 18% per year for existing policy holders, though they will go into immediate effect for new policies as they are issued. Roughly 15,000 homes in the parish will be impacted by the changes to flood insurance pricing. 

For Lafayette ZIP Codes along the Vermilion, 70503 and 70508, the new system will ultimately see premiums double, while most of the parish’s other ZIP Codes will see increases between 50% and 75%. Meanwhile, coastal parts of Acadiana will see premiums triple or quadruple, with some reaching beyond $5,000 a year on average. 

The effect is a perhaps unexpected increase in cost of living for parts of Lafayette where flood risk has previously been seen as negligible and even greater cost increases in areas known to be vulnerable to flooding in the past.

Those rising costs threaten the long-term endurance of communities where the cost of insuring against the risk of flooding is becoming increasingly prohibitive, and they raise questions about the future of growth in previously undeveloped parts of the parish.