FEMA Starts Review of Sandy Flood Insurance Claims

The Federal Emergency Management Agency said Friday it has begun reviewing flood insurance claims of Superstorm Sandy victims, some of whom have said their damages were underestimated.

FEMA said in a statement the agency is mailing letters to about 142,000 National Flood Insurance Protection policyholders.

The development comes after FEMA announced plans to set up a review process in March and as some homeowners allege insurance companies unfairly assessed damage after the October 2012 storm that killed 71 people in New Jersey and 68 in New York. Insurers have denied any wrongdoing.

“Flood insurance issues arising from Hurricane Sandy are of great concern to FEMA,” said Deputy Associate Administrator for Federal Insurance Brad Kieserman. “We are committed to administering a program that is survivor-centric and helps policyholders recover from flooding in a fair, transparent, and expeditious way.”

Kristine Pyzyna of Ocean Gate is among those who question her claims payout. She told The Associated Press earlier this year 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.”

The review was announced after 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 in March. At the time, the lawmakers hailed the meeting as a major development.

The senators also 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. Some homeowners said they believe the underestimation was deliberate so companies would not have to pay out the full amount of claims

FEMA also asked engineering and insurance firms to give survivors access to their engineering reports, which were commissioned to assess damage.