FEMA Begins Review of Superstorm Sandy Flood Insurance Claims

The Federal Emergency Management Agency (“FEMA”) has begun to review claims arising out of damages caused by Superstorm Sandy, in which many victims alleged that their damages were underestimated by their insurers. FEMA previously announced in March that it would set up a process to review these claims, while insurers have denied any wrongdoing. At that time, U.S. Sens. Cory Booker and Robert Menendez of New Jersey and Sens. Kirsten Gillibrand and Charles Schumer of New York met with FEMA administrator Craig Fugate to address the concerns that insurers were unfairly assessing damages after the October 2012 storm. Primarily, some homeowners believed that insurers were intentionally underestimating claims in order to avoid paying out the full amounts owed.

FEMA had previously agreed to overhaul its internal system after a July 2014 hearing about FEMA’s policy of penalizing some insurers for making overpayments rather than underpayments. This included the formation of a task force to address the penalty structure. FEMA has also requested that engineering and insurance firms give Sandy victims access to the engineering reports used to assess damages. Policyholders who suffered damage as a result of Sandy and would like their claims reviewed can contact FEMA at 866-337-4262 or visit www.fema.gov.