Floridians were already facing rising home prices, mounting utility bills and unsustainable insurance premiums. Now another tidal wave is headed straight for us. The National Flood Insurance Program, run by the Federal Emergency Management Agency, began rolling out its new pricing methodology — known as Risk Rating 2.0 — on Oct. 1. The impacts from this new policy on people’s pocketbooks are deeply concerning.
The NFIP is the largest source of flood insurance for Floridians, with more than 1.7 million policies in force in the state. Eighty percent of those policies, according to FEMA’s own data, are facing higher premiums under Risk Rating 2.0. While it’s true that the NFIP is outdated and in need of improvement, it should not be done on the backs of Florida’s families.
FEMA claims this new methodology improves equity and helps policyholders better understand — and manage — their flood risk. But from what we’ve seen coming out of FEMA in recent weeks, that’s not the case. Instead, Floridians are being asked to pay even more in insurance costs, often regardless of elevation, location or home value.
I’ve been sounding the alarm on Risk Rating 2.0 since it was first announced in March 2019. My biggest fear was that the initiative would result in unsustainable insurance premiums for Floridians.
At the time, and despite repeated requests, FEMA failed to provide Congress with information on the new methodology and its impacts on policyholders. For that reason, I led a letter in November 2019 urging Congress to act to prevent expected premium spikes under Risk Rating 2.0.
Just days later, FEMA announced a delay in implementing the program, making it clear that even FEMA knew this new methodology would be problematic.
It wasn’t until summer 2021, however, that FEMA finally started releasing information on Risk Rating 2.0 and its expected impacts. That left almost no time for congressional oversight, for insurers to write policies using the new methodology and for homeowners to figure out how to manage premium spikes before the new rates took effect.
That’s why I sent another letter in September requesting a further delay in implementing the new methodology — so that Congress has time to exercise its constitutional duty to provide oversight and make sure FEMA doesn’t price families out of their homes.
As I wrote in 2017, if homeowners can’t afford flood insurance, they won’t buy it. This will leave families unprotected from flood damage, and put the federal government — and the taxpayer — on the hook for post-disaster costs.
And while some believe the private market will absorb policyholders who face sharp premium increases under Risk Rating 2.0, the private flood insurance market is still very young. We don’t yet know if private insurers have the capacity to handle such a large influx of customers at one time. We should not be placing all of our faith — and the livelihoods of Floridians — on an untested system.
The NFIP must remain a reliable source of flood insurance. To do that, it must remain affordable. That’s why FEMA needs to hit pause on Risk Rating 2.0 to allow Congress time to fully examine its far-reaching consequences.
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Florida’s families, whose wallets are already under stress from rising housing related costs, shouldn’t have to endure another hit to their monthly budget.
U.S. Rep. Charlie Crist represents St. Petersburg, Clearwater and most of Pinellas County. He served as governor from 2007 to 2011 as a Republican, and he is seeking the Democratic nomination for governor in 2022.