Photo Credit: Sebastian Pichler, Unsplash

On June 1 Louisiana Attorney General Jeff Landry announced a lawsuit against FEMA challenging the agency’s Risk Rating 2.0 (RR2.0) methodology.

Florida, along with 8 other states, joined Louisiana in the lawsuit seeking relief from the sharp increases in flood insurance rates and demanding transparency in FEMA’s rate setting methodology.

Fair Insurance Rates in Monroe (FIRM) along with its colleagues in the Coalition for Sustainable Flood Insurance (CSFI) contributed information that formed the basis of the suit. CSFI is a national coalition with over 250 member groups from 35 states advocating for a stronger framework for the National Flood Insurance Program (NFIP).

The Associated Press reports “…state and local officials renewed complaints that federal officials have refused to divulge methodology and data used in computing the new rates. And, they said, the new premium rates fail to take into account individual homeowners’ flood mitigation efforts, such as house raising, or local governments’ construction of levees and other flood protection measures.”

For two years, FIRM has called for greater transparency from FEMA and has questioned inconsistencies in setting rates.

“While FEMA contends Risk Rating 2.0 will provide more accurate and transparent flood insurance pricing,” said FIRM President Mel Montagne, “this untested proposal is actually a huge, unregulated rate increase causing millions of flood policy holders to face extremely significant premium increases.”

“We’re seeing properties in VE zones getting lower rates than properties in AE zones,” explained Montagne. “We’re also seeing Community Rating System (CRS) discounts go away completely until a property reaches full risk rating-which may never happen as long as rates continue to rise year after year.”

The Community Rating System rewards communities that have taken steps to mitigate against flooding. In the Keys the discounts range from 15-35%.

Floridians are feeling the brunt of the new rates more acutely since Citizens Property Insurance Corporation imposed its requirement that Citizens windstorm policyholders much also purchase flood insurance.

“Homes elevated 10, 12, 15 feet above base flood that would have been Preferred Risk Properties with rates under $1,000 under the legacy rating system are seeing premiums of $5,00 to $6,000 under the Risk Rating 2.0 methodology,” Montagne explained. “As a result, many homeowners are choosing to drop all insurance because it is not affordable.”

RR2.0 rates are significantly higher than rates under the original, or legacy, method. CSFI compiled a list of the 25 counties in the United States most impacted by the steep rate increases: Monroe County is 4th in the nation with a 162.7% increase. In CSFI’s list of the top 25 zip codes with the highest rates, 2 are in Monroe County.

Along with Florida and Louisiana, other states to join the suit are Idaho, Kentucky, Mississippi, Montana, North Dakota, South Carolina, Texas and Virginia.

read the summary read the full complaint

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