FEMA, HUD Grant Relief to Sandy Victims

The Federal Emergency Management Agency (FEMA) on Sept. 15 announced an official 30-day deadline extension for National Flood Insurance Program (NFIP) policyholders who are considering requesting Superstorm Sandy-related payment reviews.

The announcement means the initial Sept. 15 deadline has been formally extended to Oct. 15. The extension was announced just before the expiration of the Sept. 15 deadline. The extension came in the wake of the U.S. Department of Housing and Urban Development’s (HUD) announcement that any new flood insurance proceeds up to $20,000 wouldn’t be subject to a duplication-of-benefits review or collection for Sandy victims who also received federal disaster assistance from HUD’s grantees — such as New Jersey’s Reconstruction, Rehabilitation, Elevation and Mitigation program.

HUD said it has determined that below $20,000, any benefit gained by going through a protracted process of reexamining and documenting costs incurred by homeowners would not outweigh the larger financial and human costs associated with doing so.

HUD’s announcement could persuade yet more NFIP Sandy claimants to apply for a claims review, since the possibility that the new insurance proceeds could be interpreted as a duplicate benefit for those who received federal disaster assistance has been a concern for Sandy victims.

HUD also said that even those families who will receive more than $20,000 in additional insurance payments would still have the opportunity to demonstrate that the added claim payments address legitimate unmet needs and therefore are not duplicative.

Roy Wright, FEMA’s deputy associate administrator for Insurance and Mitigation, encouraged NFIP policyholders to call FEMA and request a review if they believe their claims were underpaid for any reason. As of Sept. 14, nearly 14,000 policyholders had requested reviews of their Sandy flood insurance claims.

“FEMA remains committed to making sure that every policyholder gets every dollar they are owed under their flood insurance policy,” said Wright. He noted that already, thousands of policyholders have contacted FEMA to have their claims reviewed and that FEMA has begun providing funds to those who were due additional payments on their claim.

“We are hopeful that HUD’s action to provide relief to the vast majority of those who are concerned about potential duplicative benefits will encourage even more policyholders who may have been initially reluctant to enter the process to do so,” said Wright. “We hope by extending the deadline we are addressing any remaining concerns some may have about entering the claims review process.”

“The review process we have established is designed to be simple, fair, and accessible without paid legal assistance,” he said.

In May, FEMA sent letters to some 142,000 NFIP policyholders who filed Sandy claims, offering them an opportunity to have their files reviewed. The NFIP had already paid out more than $3.5 billion to policyholders whose homes were damaged or destroyed by Sandy. However, the program drew scrutiny after allegations of fraud involving how some insurance companies assessed damage after the storm. Insurers have denied wrongdoing.

Topics Flood