EDITORIAL: Suit against flood insurance makes sense - Insurance News | InsuranceNewsNet

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June 10, 2023 Newswires
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EDITORIAL: Suit against flood insurance makes sense

Charlotte Sun (Port Charlotte, FL)

OUR POSITION: We'll hold our breath and hope Florida and nine other states can win some relief for homeowners through their lawsuit over the overhaul of the National Flood Insurance Program.

We're hearing the stories.

One single woman, a grandmother, opened her home insurance bill this week and gasped at the $11,000 premium.

Another, also a single woman, put her house on the market immediately after she received her 2023 home insurance bill.

We heard first-hand of a third woman, a widower who has lived in her canal front home for 40-plus years, who said her bill skyrocketed, but in those 40-plus years the water has creeped over the seawall only twice and never into her home — even after a 100-year storm like Hurricane Ian.

All of these people, and about 1.4 million others in Florida, are trying to come to terms with higher insurance premiums that as of April 1, became effective, after a phasing in of the past two years.

It has been a shock to most. Some are selling homes. Some are leaving the state. Some just don't know what to do, except pay.

The situation motivated Florida to join a lawsuit filed by Louisiana Attorney General Jeff Landry against, among others, the Federal Emergency Management Agency (FEMA).

Florida's home insurance troubles have been well documented the past couple of years in headlines and on these Viewpoint pages. The Legislature belatedly passed some measures to try to stem the tide this year, but the help won't be immediate.

According to a News Service of Florida story that published Tuesday in The Daily Sun, there are $367 billion worth of property insurance premiums the new FEMA flood insurance program covers.

The new system, known as Risk Rating 2.0: Equity in Action, has changed the way premiums and risks are calculated. The lawsuit alleges the rating system relies too heavily on "hypothetical" future risks, doesn't account for mitigation projects that protect properties from flooding and likely does not take into consideration past history of how properties fared in hurricanes.

According to the NSF story, a portion of the lawsuit said "high insurance rates will cause people to leave the state of Florida because they can no longer afford to live in the state. In addition it will depress property values, particularly in areas where flood insurance is required."

And, where flood insurance is required is in most of Charlotte and Sarasota counties.

One of the biggest arguments Florida and the other states are making is that FEMA relied too much on climate change theories which — even if true — do not impact properties right now.

The suit says "Equity in Action uses catastrophic modeling which takes into account future hypothetical events, including hypothetical events resulting from climate change."

The states involved are requesting an injunction against the new system and a requirement that federal officials disclose the methodology and data used, according to NSF.

These changes in insurance premiums have been on the horizon for years. The changes should be no surprise. But the shocking hikes in premiums were surely more than most people expected. Those came without warnings.

While we understand the need to protect homes — especially those with mortgages — from flood damage, we believe these sudden adjustments have left too many of Florida's lower-income and fixed income homeowners desperate for help.

There has to be a reasonable answer. We hope the lawsuit provides one.

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