Florida has filed a lawsuit against First Street Technology Inc., a climate-risk modeling firm, alleging that its risk scores for homes in the state are based on flawed scientific methods and unjustly harm homeowners. The complaint, announced by Florida Attorney General James Uthmeier, contends that First Street’s climate risk assessments—intended to measure exposure to hazards such as flooding, wildfire, extreme heat, and wind—are inaccurate and negatively impact property values and residents’ finances.

First Street Technology, which was recently acquired by MSCI Inc., employs computer models to evaluate climate-related threats at the individual property level, producing scores from 1 to 10. These scores are distributed widely through real estate platforms to aid consumers in assessing the long-term risks associated with properties. Since the release of its initial major report in 2020, several real estate websites, including Zillow, Redfin, and Realtor.com, have incorporated the scores into their listings. Additionally, Connecticut’s state insurance department partnered with the company to provide free assessments to homeowners.

While the intention behind the scores is to increase transparency and support informed buying decisions, they have sparked controversy, with critics arguing that the methodology lacks sufficient precision at such a granular scale. Last year, Zillow ceased directly displaying First Street’s scores following objections from the California Regional Multiple Listing Service. Real estate agents and sellers have raised concerns that these scores could depress home values and slow sales.

A 2024 analysis highlighted the discrepancies between First Street’s flood-risk estimates for Los Angeles and those produced by an academic research team, finding only about 25% overlap in identified risk areas. Florida’s lawsuit accuses First Street of engaging in “climate chicanery” by promoting “fake” risks to advance a climate activism agenda while profiting from the sale of its data. The state argues that reliance on flawed risk scores could have serious consequences, including increasing insurance premiums or hindering homeowners’ access to coverage.

Nebraska filed a similar lawsuit against First Street in August amid rising concerns over housing affordability and escalating insurance costs nationwide. The issue has become more pressing as homeowners face mounting economic pressures influenced in part by climate risk assessments.

Experts note the inherent uncertainty in climate-risk modeling and caution against dismissing such efforts outright. Boston University law professor Madison Condon, who studies climate risk and finance, acknowledged concerns regarding First Street’s marketing practices but warned that lawsuits of this nature might inhibit the availability of physical climate-risk data. She emphasized that scientific models often differ without any intentional deception.

MSCI Inc. did not respond to requests for comment on the ongoing litigation. As Florida and Nebraska pursue legal action, the debate over how climate risk should be measured and communicated to property owners continues amid broader challenges linked to insurance markets and housing affordability.