NFIP Flood Insurance Premium Increases — A Lawsuit Moves Forward

Ten states and several municipalities, parishes, levee districts and others are challenging the rate increases of the National Flood Insurance Program’s (NFIP) Risk Rating 2.0. They have filed a lawsuit now being heard by U.S. District Judge Darrel James Papillion.

Two of the states — Idaho and Montana — are PIA Western Alliance states.

The others are Louisiana, Florida, Kentucky, Mississippi, North Dakota, South Carolina, Texas and Virginia. The states contend the rate increases are too high for a lot of homeowners to bear and fear it could lead for foreclosures and to a disrupted homeowners market.

The judge ruled last week that the suit can move forward, however, only the 10 states and Louisiana’s St. Tammany, Livingston and Washington parishes will be a part of the suit.

Papillion also — to the disappointment of the plaintiffs — said he will not intervene and the rate increases can go on as planned until the suit is settled. “Any interest the public has in the need for federal agencies to follow the law is outweighed by the public’s interest in the stability of the administration of the National Flood Insurance Program,” the judge said in his ruling,

He also noted the importance of the tens of millions of dollars the NFIP put out to put the new system in place.

The Federal Emergency Management Agency (FEMA) oversees the NFIP. It offered no comment on the judge’s decision but has noted several times in the past that the rate increases are critical and are needed to reflect the actual flood risk of each property.

Risk Rating 2.0 — FEMA contends — will eventually put the NFIP on solid financial footing. As it stands now the NFIP’s debt is $20.525 billion.

Louisiana Attorney General Liz Murrill originally argued the case before the judge. She expressed disappointment.

“We are disappointed in the ruling, which elevated the government’s admittedly flawed program over people who are facing the loss of their homes and their communities at the hands of FEMA,” she said. “As we move through the next phases of litigation, we’re hopeful the courts will recognize FEMA’s unlawful behavior and hold it accountable.”

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