• Florida and nine other states are filing a joint lawsuit against FEMA over changes made to the National Flood Insurance Program (NFIP).
• The lawsuit claims that FEMA’s implementation of the new risk rating methodology, called Risk Rating 2.0—Equity in Action, violates federal law and is “arbitrary and capricious.”
• The changes have resulted in insurance premium increases, with coastal and low-lying areas experiencing an average rise of 100 percent.
• The lawsuit seeks to challenge the legality of the new methodology, declare it unlawful, and overturn its implementation, alleging harm to policyholders and undermining public confidence in the NFIP.

State Attorney General Ashley Moody announced that Florida is joining nine other states in a joint lawsuit contending against amendments adopted by the Federal Emergency Management Agency (FEMA) to determine flood insurance premiums.

The lawsuit specifically targets changes made to the National Flood Insurance Program (NFIP). Per documents provided by the plaintiffs, the NFIP has historically encouraged states, local governments, and citizens to adopt FEMA’s regulations and undertake flood mitigation projects by promising affordable flood insurance. The program offered lower rates than private insurance and rewarded communities and individuals for their efforts in reducing flood risk.

FEMA implemented a new methodology called Risk Rating 2.0—Equity in Action, resulting in rising premiums for most policyholders, with the lawsuit citings an average rise of 100 percent in coastal and low-lying areas. This change has led to allegations that FEMA has broken its promise and acted unlawfully.

The suit alleges that FEMA’s implementation of the new risk rating violates federal law and is “arbitrary and capricious.” Plaintiffs argue that the new methodology was enacted without proper notice and comment procedures, also failing to consider important factors like historical flood data and mitigation efforts.

They further claim that the changes have caused harm to policyholders and undermined public confidence in the NFIP. The lawsuit seeks to challenge the legality of the new methodology and requests that the court declare it unlawful and overturn its implementation.

“In fundamentally changing how it calculates rates for federal flood insurance, the agency bypassed nearly every substantive and procedural requirement under law,” reads the complaint. “Perhaps as a result, this new approach makes no sense. While the agency paints a picture of nuanced calculations using massive data repositories that reveal a property’s individualized risks, the reality is much simpler: Flood insurance is going to be more expensive.”

Over the years, NFIP has issued millions of policies, covering trillions of dollars in property value, according to the lawsuit. The program incentivized communities to adopt flood mitigation measures and offered discounts to policyholders who undertook such efforts, additionally providing stability to policyholders through grandfathering, protecting them from sudden premium increases due to mapping changes.

Attorneys General from Idaho, Kentucky, Louisiana, Mississippi, Montana, North Dakota, South Carolina, Texas, and Virginia are also partaking in the legal challenge.

“Under the Equity in Action plan, FEMA is making flood insurance unattainable for many policyholders by raising rates, going against congressional mandates that the National Flood Insurance Program provide affordable coverage,” said the Office of the Attorney General.