FEMA Sets Up Review Process for Sandy Flood Claims

In wake of allegations that some insurers in the National Flood Insurance Program (NFIP) may have denied or underpaid Superstorm Sandy flood claims based on falsified engineering reports, the Federal Emergency Management Agency is now prepared to review “every flood insurance claim” filed by Sandy victims, officials announced on March 11.

The review would be open to around 144,000 claims and won’t limit corrective action to the 2,200 that are in litigation.

Four U.S. senators from New Jersey and New York — Bob Menendez and Cory Booker (both D-N.J.) and Charles Schumer and Kirsten Gillibrand (both D-N.Y.) — said they had a meeting with FEMA Administrator Craig Fugate on March 11 to discuss Sandy flood claims process.

Menendez announced that the four senators had “a very good meeting” with Fugate, who “not only reaffirmed that the agency is implementing the comprehensive reforms we have demanded, but that FEMA has begun to set in place a process to reopen and review every flood insurance claim filed by Sandy victims who are not in litigation.”

FEMA said it is developing a process for all Sandy victims who believe their flood claims were unfairly denied or underpaid, so that their claims can be reopened and reviewed.

It was also announced on March 11 that David Miller, who has been serving as FEMA’s associate administrator for the Federal Insurance and Mitigation Administration since 2011, has resigned from the post.

According to the four senators’ announcement, Fugate said FEMA is taking steps to:

• Develop a process for all Sandy victims who are non-litigants, but believe their claims were “unjustly denied or lowballed,” so that their cases can be reopened and reviewed;
• Guarantee claimants gain access to all engineering reports;
• Contact by mail all Sandy claimants to make them aware of the new process and opportunity for review;
• Commence Sandy Task Force during the week of April 13 to begin evaluation of the program and focus on reforms; and
• Make personnel changes at senior levels of the NFIP.

The senators said Fugate also discussed during the meeting a number of issues concerning the oversight and management of the NFIP and what senators described as “evidence of fraudulent practices” by some contractors of FEMA’s Write Your Own (WYO) insurance carriers.