MARCH 3, 2015
The Federal Emergency Management Agency has tentatively
settled insurance claims with 160 Superstorm Sandy victims, who allege
engineering firms altered damage estimates. Meanwhile, lawyers say roughly 200
new policyholders say their reports were also changed.
FEMA manages the National Flood Insurance Program which,
allows people to buy flood insurance from the federal government.
Over the last several months, FEMA has been responding to
complaints that private insurance companies contracted by the National Flood
Insurance Program changed engineering reports to show homes were not damaged by
the 2012 storm.
Talks between FEMA and Superstorm Sandy Victims are being
moderated by a panel of federal magistrates in New York.
The homeowners who have submitted settlement agreements to
the court represent about a tenth of all the policyholders in litigation.
Lawyers said those settlements are the most egregious examples of engineering
companies fabricating reports to show little to no damage.
But they add most homeowners don't even know they were
shortchanged.
"I think there are thousands of people out there who
need to pull out their engineer's reports, look at the claims documents, and
see if their claims were either lowballed or denied," said Bill Kelly, a
lawyer representing roughly 700 Sandy homeowners.
Kelly and others are in talks with FEMA to reach a global
agreement to reopen anywhere from 10,000 to 140,000 Sandy claims.
Insurance companies deny all wrongdoing and say they were
merely following FEMA's rules.
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TALKS STALL BETWEEN SUPERSTORM SANDY VICTIMS AND FEMA
MARCH 1, 2015
Investigators from the New York state attorney general's
office remove boxes of documents seized from a search warrant at the Long
Island offices of GEB HiRise in Uniondale, N.Y., on Wednesday, Feb. 18, 2015.
The company has been accused in civil lawsuits of submitting bogus inspection
reports involving homes damaged in Superstorm Sandy.
Negotiators for Superstorm Sandy victims in New York and New
Jersey said talks with the Federal Emergency Management Agency have stalled.
FEMA manages the National Flood Insurance Program, which
allows people to buy flood insurance from the federal government. FEMA
contracts with regular insurance companies to process the claims. Homeowners
claim engineers hired by insurance companies allegedly falsified damage
estimates and that homeowners aren't being repaid for the actual damage that
Sandy caused.
Two weeks ago, FEMA vowed to resolve all claims with
questionable engineering reports that reduced insurance payouts to homeowners
following the 2012 storm.
Last week, lawyers for Sandy victims gave FEMA a settlement
package that would repay some 10,000 homeowners the full value of their
insurance policies, $250,000 each. The proposal also asked FEMA to increase the
amount it paid to all policy holders for building materials to accommodate New
York's higher prices. The homeowners' lead lawyer, Steve Mostyn, said all
together, he wants FEMA to pay out an additional $3-4 billion, or about half of
the $7.7 billion that the flood program has paid out already.
"The concerning thing is, the initial response I got is
that they can't reopen that many claims, it's just too many," Mostyn said.
The National Flood Insurance Program is currently $23
billion in debt to the U.S. Treasury.
Meanwhile, elected officials in the region have begun pressuring
FEMA to reopen questionable claims and they're asking New York Attorney General
Eric Schneiderman to monitor. Assemblyman Phil Goldfeder of Queens wants New
York to create its own flood insurance program, overseen by the state
Department of Financial Services.
"It's about time we start making decisions for
ourselves and not be controlled by a broken FEMA-NFIP system," Goldfeder
said.
FEMA declined comment but earlier statements say they want
to regain the trust of flood policy holders. Insurance companies and their
subcontracted engineering firms have denied all wrongdoing. They said they
followed the rules Congress and FEMA established.
