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Report finds major issues with the National Flood Insurance Program

Wed Aug 3rd, 2016 on     Homeowners Insurance,    

As hard as it may seem to believe, it’s now been almost four years since the East Coast was hit by Superstorm Sandy, a hurricane of epic proportions that left tens of thousands of people in New York and New Jersey with major or catastrophic damage to their homes.

While many of these homeowners initially looked to the National Flood Insurance Program administered by the Federal Emergency Management Agency for recovery assistance, a large number soon came forward with nightmarish claims of lengthy delays, concealed information, and underpayment or even denials of otherwise valid claims.

Interestingly enough, a recently released report by the Office of the New York Attorney General Eric Schneiderman confirmed many of these claims, finding that a distinct “lack of transparency and accountability” in the NFIP is costing taxpayers millions of dollars.

Specifically, the report determined the following:

  • Flood insurance is not covering what is otherwise promised in advertisements.
  • Engineers and other experts retained to evaluate Superstorm Sandy-related damage were unqualified.
  • Homeowners were improperly prevented from viewing copies of their reports.
  • FEMA is failing to monitor the engineers and insurance companies retained to manage flood policies on its behalf.

In keeping with this last point, it’s worth noting that the AG’s office also brought 50 felony charges against an engineering firm that it claims fraudulently altered damage assessment reports written by engineers.

The report also made some recommendations for FEMA to consider, including:

  • Supplying customers with a single sheet that explains clearly and concisely what is and isn’t cover by their flood insurance policies
  • Introducing a national certification process for engineers tasked with damage assessments
  • Providing customers with access to all reports and other documents that are considering in denying or approving a flood-related claim
  • Creating greater transparency on the fees paid to engineering experts

For its part, FEMA acknowledged the findings, and declared that it would enable homeowners to see documentation going forward, and that measures to enhance oversight and transparency were already in the process of being added.

Stay tuned for updates on this fascinating story …

Consider speaking with an experienced legal professional as soon as possible if you have questions or concerns related to denied or delayed claims under a homeowners’ or flood insurance policy.

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