Mississippi AG joins lawsuit over federal flood insurance rating

Attorney General Lynn Fitch announced Friday that Mississippi joined nine other states in a lawsuit against the federal government over it’s flood insurance rating system.

The rating system calculates the risk of flooding for homeowners who’ve signed up for the National Flood Insurance Program and determines their monthly rates. The Federal Emergency Management Agency, or FEMA, recently released an updated version of the system, called “Risk Rating 2.0,” which the agency says more accurately determines flood risk and more equitably distributes premium costs.

FEMA began implementing the new system in October 2021, and fully incorporated it this past April.

But after seeing large rate increases for some, Fitch and other state leaders argue the new system is hurting homeowners.

“Homeowners who suffer natural disasters should expect us to come alongside them and offer a helping hand,” Fitch said in a Friday press release. “Instead, the Administration’s latest action makes flood insurance prohibitively expensive, forcing many homeowners to leave their homes or face bankruptcy or foreclosure.”

The NFIP, the release says, is the primary source of flood insurance coverage for homes throughout the country, and as of last September, accounted for 31,682 policies in Mississippi.

“While Risk Rating 2.0 initially looked promising, it has proven to be less than fair to consumers and is shrouded in secrecy,” Mississippi Insurance Commissioner Mike Chaney said. “The financial impact to many customers has been, and continues to be, devastating.”

Louisiana, Florida, Idaho, Kentucky, Montana, North Dakota, South Carolina, Texas and Virginia are also plaintiffs in the lawsuit.

According to an infographic on FEMA’s website, the average policyholder will see an $8 per month increase on their premium, and 4% of policyholders will see an increase of more than $20 a month. But areas that have especially high flood risks, including parts of southeastern Louisiana, will have an average increase of over 500%, NPR reported. Fitch’s release claims some rates will increase “by more than 10 times” in Mississippi and other states.

Fitch also claimed that FEMA “failed to work collaboratively with state and local governments,” and didn’t account for mitigation measures such as levees that kept previous rates lower.

The Mississippi Emergency Management agency echoed Fitch’s criticisms.

“We at MEMA are grateful to (Fitch’s) office for taking legal (action) against Risk Rating 2.0,” Malary White, MEMA’s chief communications officer, said in a statement, adding that the formula for the new system is still “unknown.”

“Mississippians have a right to affordable flood insurance.”

The plaintiffs filed the lawsuit Thursday in the U.S. District Court for the Eastern District of Louisiana against FEMA, the U.S. Department of Homeland Security, and Federal Insurance and Mitigation Administration.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.