Judge refuses to block flood insurance changes

TALLAHASSEE – A federal judge has denied a request by Florida and other states for a preliminary injunction to block changes to the National Flood Insurance Program that have led to higher premiums for many property owners – though he ruled that a more wide legal can continue.

U.S. District Judge Darrel James Papillion, who is based in New Orleans, issued a 56-page ruling last week that pointed to potential problems if he issued an injunction against a risk assessment system that began entering effective in 2021 and was fully in effect in April 2023. The lawsuit, led by Louisiana and including Florida and eight other states, was introduced in June 2023.

“The Court . . . finds that, in light of the particular claims in this case and to the extent that plaintiffs are likely to succeed on any of them, any public interest in requiring federal agencies to follow the law is outweighed by the public interest to the stability of the administration of the National Flood Insurance Program, which would be greatly disrupted if this court were to issue a preliminary injunction prohibiting the defendants from implementing the assessment methodology that was fully implemented prior to the filing of this action by the plaintiffs, ” , Papillion wrote.

But Papillion also ruled that the state and three local governments in Louisiana can continue to pursue the lawsuit, rejecting federal arguments that the case should be dismissed for lack of legal standing. In part, he said states have shown they can face higher flood reconstruction costs if property owners drop National Flood Insurance Program policies because of rising costs.

“While plaintiffs’ contention that increased premiums will lead to fewer policies in force is conclusive, the court also finds that plaintiffs have plausibly established this allegation in a manner sufficient to sustain their burden at the motion stage for dismissal,” the judge. wrote on Thursday.

The lawsuit, filed in the Eastern Federal District of Louisiana, focuses on changes known as “Risk Assessment 2.0: Equality in Action.” Federal officials claim the changes are designed to make the flood insurance program actuarially more accurate and reflect the risks of each property.

But the lawsuit alleges, in part, that federal officials violated a law known as the Administrative Procedure Act by making changes that were “arbitrary and capricious.”

The National Flood Insurance Program plays a key role in states like Florida and Louisiana, as many homeowners with mortgages are required to carry flood insurance. Typical property insurance policies do not include flood insurance, forcing homeowners to purchase additional coverage.

A document in the lawsuit said the National Flood Insurance Program includes about 1.391 million Florida Politics, with total coverage of nearly 367 billion dollars. The lawsuit comes as homeowners across Florida also face higher costs for property insurance policies that cover perils such as wind and fire damage.

Along with Florida and Louisiana, other states in this case are Idaho, Kentucky, Mississippi, Montana, North Dakota, South Dakota, Texas and Virginia. The defendants include the US Department of Homeland Security and the Federal Emergency Management Agency.

In a document filed last year seeking to dismiss the case, lawyers for the US Department of Justice argued that the plaintiffs had exaggerated the “skyrocketing costs” after the change in the risk assessment system. The document said 19 percent of premiums went down and 70 percent went up by less than $10 a month.

“These changes reflect all of the best practices in the insurance industry, which is exactly what Congress mandated FEMA (Federal Emergency Management Agency) to do under the NFIA (National Flood Insurance Act),” the Department’s attorneys wrote. of Justice. “Furthermore, the geographic distribution of premium payments has been dismal: Under the (previous) legacy classification approach, taxpayers and policyholders in landlocked states were covering the cost of flood risk in some coastal states. Risk Rating 2.0 charges each policyholder their fair share based on the true flood risk of their property and thus fulfills NFIA’s stated purpose.”

But advocates for state and local governments in Louisiana noted the “crippling effects” of changes to the program.

“Plaintiffs do not dispute that, under the inheritance assessment system, many individuals suffered slight annual increases as permitted by (a federal law),” attorneys for the plaintiffs wrote in a filing last year. “But policyholders have never seen rate increases like the ones they’re seeing” according to the changes.

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