N.Y. Senator Gillibrand to FEMA: Review Flood Insurance Rules

U.S. Sen. Kirsten Gillibrand (D-N.Y.) has asked the Federal Emergency Management Agency to review rules that resulted in insurance coverage denials for some Superstorm Sandy victims.

Gillibrand’s letter last week came after reports that the National Flood Insurance Program is denying claims to thousands of homeowners who have costly damage to their foundations due to Sandy. Currently, a FEMA provision states that the agency does not insure property loss caused directly by earth movement, even if the movement is caused by a flood.

Gillibrand says it’s not right for “bureaucratic fine print” to stand in the way of getting homeowners back on their feet. She wants the denials reconsidered.

[Full text of Sen. Gillibrand’s open letter to FEMA Administrator Craig Fugate is below:

Dear Administrator Fugate,

I am writing to express my complete dismay at recent reports that potentially thousands of homeowners in New York and New Jersey are being denied claims by FEMA for damage to the foundations of their homes as a result of flooding caused by Superstorm Sandy. I understand that these denials are based on a provision in FEMA’s standard flood insurance policy, which is found in the U.S. Code of Federal Regulations (44 CFR, Part 61, Appendix A), that states that FEMA does not insure for loss of property caused directly by earth movement even if the earth movement is caused by flood.

It is unacceptable for the Federal government to use such loopholes to deny responsible homeowners the benefits that they have paid for through their insurance premiums. To deny these claims pulls the rug out from underneath homeowners who are relying on their flood insurance policies to repair and rebuild their homes, now nearly eight months after Sandy hit our shores.

While I understand that flood insurance policies cannot cover every single loss that was incurred as a result of Superstorm Sandy, damages that were a result of storm surge and encroaching flood waters should not be excluded from flood insurance policies. To address this issue, I request that you immediately review the regulatory requirements for FEMA’s standard flood insurance policy and reconsider the denials that have been issued to homeowners based on the “earth movement” exclusion. I also request that you keep my office informed of the status of this request, and the actions that FEMA plans to take to address these concerns.

Thank you for your attention to this urgent request.]