Attorney General Fitch Sues Federal Government

Attorney General Fitch Sues Federal Government to Stop Dramatic Increases in Flood Insurance Rates for Mississippi Homeowners

MS Insurance Commissioner says Risk Rating 2.0 “has proven to be less than fair to consumers”

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

(Jackson, Mississippi) Attorney General Lynn Fitch yesterday joined Louisiana Attorney General Jeff Landry in filing a multi-state lawsuit in the U.S. District Court for the Eastern District of Louisiana against the U.S. Department of Homeland Security, the Federal Emergency Management Agency (FEMA), and the Federal Insurance and Mitigation Administration. The suit challenges a new federal flood insurance rating formula that is causing rates to increase – often by more than 10 times – in Mississippi and other states across the nation.

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

The suit contends that FEMA’s new flood insurance rating scheme, “Risk Rating 2.0 – Equity in Action,” deviates from the federal law that established the National Flood Insurance Program (NFIP) and that required rates be as reasonable as practicable in order to encourage more homeowners to protect against catastrophic flood risk. The Attorneys General and local governments note that FEMA failed to work collaboratively with state and local governments and to account for risk mitigation efforts, such as levees, that have previously helped keep rates affordable.

“While Risk Rating 2.0 initially looked promising, it has proven to be less than fair to consumers and is shrouded in secrecy. The financial impact to many consumers has been, and continues to be, devastating,” said Mississippi Insurance Commissioner Mike Chaney. “I support General Fitch’s efforts in joining the multi-state suit and fighting for consumers, both in Mississippi and beyond.”

The complaint states, “The Equity in Action methodology would have benefitted significantly from public notice and comment. In developing Equity in Action, [the Administration] made assumptions about millions of Americans’ property, about important scientific questions, about mitigation measures, about the future, about homes, and about how all of these assumptions would all interact. But FEMA did not subject any of those parts of Equity in Action to notice and comment.”

The NFIP is the primary source of flood insurance coverage for residential properties in the U.S., providing more than 5 million policies and over $1.3 trillion in coverage in more than 22,500 communities across the country. As of September 30, 2022, Mississippi has 31,682 policies in force. Currently, the average cost of insurance for a single family home is $858. Under the Administration’s new formula this rate could more than double to $2,137.

Joining the State of Mississippi in this litigation are the State of Florida, the State of Idaho, the State of Kentucky, the State of Louisiana, the State of Montana, the State of North Dakota, the State of South Carolina, the State of Texas, the State of Virginia, Acadia Parish, Ascension Parish, Assumption Parish, Avoyelles Parish, Bossier Parish, Caldwell Parish, Cameron Parish, Catahoula Parish, Claiborne Parish, Concordia Parish, East Baton Rouge Parish, East Feliciana Parish, Evangeline Parish, Franklin Parish, Grant Parish, Iberville Parish, Jackson Parish, Jefferson Parish, Jefferson Davis Parish, Lafayette Parish, Lafourche Parish, Livingston Parish, Madison Parish, Orleans Parish, Plaquemines Parish, St. Bernard Parish, St. Charles Parish, St. Helena Parish, St. James Parish, St. John the Baptist Parish, St. Landry Parish, St. Mary Parish, St. Tammany Parish, Tangipahoa Parish, Tensas Parish, Terrebonne Parish, Vermilion Parish, Vernon Parish, Washington Parish, Webster Parish, West Baton Rouge Parish, West Feliciana Parish, Winn Parish, Bossier Levee District, Fifth Louisiana Levee District, Grand Isle Independent Levee District, Lafourche Basin Levee District, North Lafourche Conservation Levee and Drainage District, Ponchartrain Levee District, Southeast Louisiana Flood Protection Authority – East, Southeast Louisiana Flood Protection Authority – West, South Lafourche Levee District, St. Mary Levee District, St. Tammany Levee District, East Ascension Consolidated Gravity Drainage District No. 1, City of New Iberia, Town of Jean Lafitte, Town of Grand Isle, and Association of Levee Boards of Louisiana.

Read the full complaint here.