HELENA – Montana Attorney General Austin Knudsen and nine other state attorneys general are suing the Biden administration over its new “Equity in Action” methodology used to calculate flood insurance rates that would force Montanans to pay hundreds of dollars more per year.

Under the Federal Emergency Management Agency’s (FEMA) new “Risk Rating 2.0 – Equity in Action” methodology, policies for 2,170 single family homes in Montana would see their flood insurance costs skyrocket by an average of 84 percent, or $757 per year. Using a methodology that “defies both law and logic,” “Equity in Action” raises flood insurance premiums in places that have never seen a flood and determines policy costs based on hypotheticals rather than observed flood events.

“Under Equity in Action, the agency ignores historical observed flood events and demonstrably effective mitigation efforts in favor of future flood hypotheticals to determine the flood risk of each insured property. Those hypotheticals, in turn, determine how much a flood insurance policy is going to cost,” the attorneys general state in the lawsuit. “In fundamentally changing how it calculates rates for federal flood insurance, FEMA bypassed nearly every substantive and procedural requirement under law. Perhaps as a result, this new approach makes no sense. While the agency paints a picture of nuanced calculations using massive data repositories that reveal a property’s individualized risks, the reality is much simpler: flood insurance is going to be much more expensive for pretty much everybody.”

Originally, FEMA promised affordable flood rates that would be much lower than rates available on the private insurance market through the National Flood Insurance Program (NFIP) and to reward communities and individuals for reducing the risk of flooding. The new methodology is a bait-and-switch course reversal, fundamentally changing the calculations and drastically increasing costs while ignoring mitigation efforts and failing to disclose their methodology and input data.

The attorneys general also note in the lawsuit that the NFIP changes do not follow federal law, are arbitrary and capricious, and were enacted illegally. They ask a judge to permanently block the new methodology from going into effect and harming the residents of their states.

Click here to read the lawsuit.

Florida, Idaho, Kentucky, Mississippi, North Dakota, South Carolina, Texas, and Virginia also joined the lawsuit led by Louisiana.

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