The cost of practically everything is up since Joe Biden entered the White House. Many Floridians can now add flood insurance to the list.
Despite the efforts of Republicans in Congress – with Florida U.S. Sen. Marco Rubio among them – the Biden administration’s overhaul of the National Flood Insurance Program started on Friday.
According to FEMA, Risk Rating 2.0, as the initiative is known, represents “equity in action,” and is part of the agency’s “culture of preparedness.”
Yet it’s homeowners who ought to prepare – for higher insurance costs to match the spikes they’ve seen in the cost of gas, food, housing, and just about everything else since Biden took office.
E&E News reports that Risk Ratio 2.0, or RR2, will raise premiums for 3.8 million of the agency’s 5 million policyholders – including thousands who live in Florida.
By federal law, NFIP rate hikes are capped at 18 percent. By FEMA’s own admission, the rate hikes will vary because of several factors.
But a report by FEMA indicates 80 percent of Floridians with flood insurance will see higher rates because of RR2.
About 68 percent of them will see a rate increase that could tack on up to $120 a year.
Five percent could see their premiums jump by at least $240 a year.
On average, flood insurance costs $610 in areas of Florida considered moderate risk, and $1,198 a year in high-risk zones, according to the insurance website PolicyGenious.com.
FEMA asserts Risk Rating 2.0 “is not just a minor improvement, but a transformational leap forward” – because that is what the Biden administration is about, transforming America into something unrecognizable from what it was just three years ago.
Whereas floor insurance rates were set by the property’s elevation, FEMA claims it is now relying on “private sector data sets, catastrophe models and evolving actuarial science.”
Its “tools to address rating disparities” include looking at flood frequency, types of floods (river overflow, storm surge, coastal erosion, and heavy rainfall), and distance to water as well as elevation and the cost to rebuild.
“Currently, policyholders with lower-valued homes are paying more than their share of the risk while policyholders with higher-valued homes are paying less than their share of the risk,” FEMA maintains. “Because Risk Rating 2.0 considers rebuilding costs, FEMA can equitably distribute premiums across all policyholders based on home value and a property’s unique flood risk.”
The problem is that FEMA apparently won’t explain anything specific about what will drive these rate hikes, according to Rubio and GOP Sens. Cindy Hyde-Smith and Roger Wicker of Mississippi and John Kennedy and Bill Cassidy of Louisiana, who introduced a bill this week to maintain existing rates until FEMA could better explain the program’s changes.
“Despite my repeated warnings, the Biden Administration is going full steam ahead with implementing Risk Rating 2.0. As a result, the majority of policyholders will see rate increases this week,” Rubio said in a statement earlier this week. “At the very least, homeowners deserve transparency with regard to the rate hikes – which is exactly what this legislation would provide.”
Hyde-Smith noted in a statement that FEMA moved forward despite homeowners not having the benefits of “notice and comment, an established policyholder premium appeals method, economic impact analysis, independent peer review, updated environmental impact statement, or assurance of data reliability.”
The bill the GOP senators introduced – the Homeowner Flood Insurance Transparency and Protection Act – would ensure that policyholders would see stable premiums until FEMA provided a basic analysis and disclosure requirements to justify the new methodology. One of its provisions would allow property owners to decide if they want to stick with the current situation or opt for FEMA’s approach.
“FEMA is acting with complete and astonishing disregard for the rights of individual citizens to understand and, if necessary, challenge their government,” Smith-Hyde said in a statement.
“Policyholders from coast-to-coast have the right to understand the data and processes used by FEMA to calculate the estimated flood risk and government-issued insurance costs for their homes or commercial properties. It is unconscionable that the technical underpinnings and real-world costs and benefits of RR2.0 are being concealed by the government.”
Disallowing full transparency, she added, “risks public mistrust, swift declines in residential and commercial property values, failure to accurately communicate flood risk, and further harm at the expense of the policyholder.”