FEMA sets up review process for Sandy flood insurance claims
TRENTON, N.J. (AP) — Federal Emergency Management Agency officials have agreed to provide Superstorm Sandy victims who think their insurance claims were not fairly paid out a chance for a review.
The review could include up to 144,000 claims and won't limit corrective action to 2,200 that are currently in litigation.
The announcement comes following allegations of fraud involving how some insurance companies assessed damage after the October 2012 storm that killed 71 people in the state and cost the country $65 billion. Insurers have denied any wrongdoing.
FEMA spokesman Rafael Lemaitre said Thursday the agency is setting up a process for survivors to have their claims reviewed. A claim review will not be automatic, however.
Kristine Pyzyna of Ocean Gate is among those who question her claims payout. But she said she won't rely on the review process and is seeking legal help instead.
"They are confirming everything that all of us knew out here," she said. "There was something really wrong out here but we couldn't prove it."
Sens. Robert Menendez and Cory Booker of New Jersey and Charles Schumer and Kirsten Gillibrand of New York met with FEMA administrator Craig Fugate on Wednesday and announced the review process afterward. The lawmakers hailed the meeting as a major development.
"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," Menendez said in a statement.
The fraud allegations reach back to homeowners who say engineering reports commissioned by insurers inaccurately underestimated damage. The senators raised questions during a July 2014 hearing about FEMA's policy of penalizing some insurers for making overpayments more than for making underpayments. As a result of the hearings, the senators say, FEMA agreed to overhaul its internal system, including the formation of a task force to address the penalty structure.
The new process also comes after Menendez and New Jersey Rep. Frank Pallone introduced a bill earlier this year that would stop FEMA from collecting reimbursement from Sandy victims of what the agency says were overpayments. The legislators estimated that FEMA had sent letters to some 3,000 New Jersey and New York residents demanding repayment.
FEMA also asked engineering and insurance firms to give survivors access to their engineering reports.
Pyzyna faults the engineering reports in particular for her troubles in recovering from the storm. She said that to repair her Ocean County home, she maxed out her credit card, took out loans and borrowed from her pension to compensate for lower-than-expected insurance payouts.
"I would like to be compensated. I would like to return money to my pension and pay off my credit card," she said. "But what do I really want to happen? I want to be sure this never ever happens to any other disaster victim. This has to stop."