FEMA Sets Up Review Process for Sandy Flood Claims

March 12, 2015 by

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

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.) — announced that they had a meeting with FEMA Administrator Craig Fugate Wednesday afternoon, and the federal agency is prepared to reopen and review every flood insurance claim — approximately 144,000 — filed by Sandy victims, and not limit corrective action to just the 2,200 currently in litigation.

FEMA said it will develop a process for all Sandy victims who are non-litigants, but believe their claims were unjustly denied or underpaid, so that their claims can be reopened and reviewed.

It was also announced during a press conference by Menendez and Booker Wednesday that a senior FEMA official, David Miller, who has been serving as FEMA’s associate administrator for the Federal Insurance and Mitigation Administration (FIMA) since September 2011, has resigned from the post, according to media reports.

According to the senators’ announcement, Fugate said during the the meeting that 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,” to 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.

Fugate also discussed a number of issues the senators have raised concerning the oversight and management of the National Flood Insurance Program and “evidence of fraudulent practices by some contractors of FEMA’s Write Your Own (WYO) insurance carriers,” according to the announcement.

“We had a very good meeting today with FEMA Administrator 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,” Menendez said Wednesday.

Menendez said this is a significant turnaround for the thousands of Sandy survivors who have been “victimized not only by the storm, but by FEMA, insurance companies and their subcontractors who systemically lowballed claims.”

“For months and months, I have been fighting to expose this scandal and make sure Sandy victims get what they’re entitled to and I’m pleased FEMA has admitted there are big problems and has committed to fixing them,” said Menendez. “I intend to hold their feet to the fire every step of the way to ensure Sandy survivors receive the fair treatment they deserve.”

Booker said he is encouraged that FEMA has taken swift, decisive action to “fully remedy the denied flood insurance claims and possible fraudulent practices that have now been exposed.”

“The revelations were outrageous and I am committed to working with my colleagues to hold FEMA accountable. This is about transparency, it’s about accountability, and it’s about justice for our constituents,” he said.

Schumer said that in Wednesday’s meeting, “FEMA acknowledged its failure to oversee a flood insurance program that cheated Superstorm Sandy victims out of much-needed funding to rebuild their homes and get their lives back on track.”

“Amongst many necessary reforms, I am particularly pleased that FEMA Administrator Fugate and [FEMA’s deputy associate administrator for insurance] Brad Kieserman have heard our call and will reopen and review all 144,000 flood insurance claims made by Sandy victims — a critically necessary move,” said Schumer.

Schumer said FEMA also made clear that it plans to hold accountable “all those who were involved in the program that may have facilitated or fostered this fraudulent behavior.”

“I will continue to work hard, alongside my colleagues, until the National Flood Insurance Program does what it’s supposed to do: fairly pay storm victims, on time and for the damage they suffered,” Schumer announced.

Gillibrand said that “from the moment I saw the evidence of this fraud, my first thought was that someone should go to jail for this, so I called the New York Attorney General to ask him to take a look at it, and raised the issue with Administrator Fugate.”

“I am pleased the Attorney General is investigating this very closely and the seriousness the Administrator expressed today in making this right for homeowners and ensuring everyone involved in this fraud is held accountable,” said Gillibrand. “There needs to be top to bottom reform so that this can never happen again.”

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