Navigating the Flood: How Rising Insurance Costs Threaten Communities Amid Climate Change
The Federal Emergency Management Agency (FEMA)’s Risk Rating 2.0 program, implemented in October 2021, represents a significant overhaul of the National Flood Insurance Program’s (NFIP) pricing methodology. While the new system aims to more accurately align flood insurance premiums with individual property risks, it has sparked both praise and controversy. The State of Louisiana filed suit against FEMA arguing that it has not provided sufficient transparency regarding the new rating system. Louisiana’s political leadership, including the governor and congressional representatives from both parties, have been advocating for FEMA to reconsider its flood risk assessments in vulnerable regions. They argue that the current Risk Rating 2.0 system fails to adequately account for the significant investmentsmade in flood protection and storm resilience infrastructure since major disasters like Hurricanes Katrina and Rita in 2005 and the severe flooding that impacted the Baton Rouge area in 2016. These leaders contend that these substantial improvements in flood mitigation should be reflected in FEMA’s risk calculations. The lawsuit demands more information about the risk model, which they claim relies on “undisclosed, hypothetical, and abstract possibilities.” The lack of comprehensive information provided directly to policyholders has also been identified as a significant issue.