Sen. Schumer Says Flood Insurers Are Too Slow in Processing Claims

December 5, 2011

U.S. Senator Charles Schumer (D-N.Y.) is calling on flood insurance companies to speed up their processing of insurance claims from tropical storms Irene and Lee to ensure that FEMA aid reaches flood-damaged communities more quickly.

Schumer, the U.S. Senate’s third-ranking Democrat, sent a letter to New York’s flood insurance providers last week, urging them to speed up the processing of claims.

Schumer wrote in his letter that “the National Flood Insurance Program write your own (WYO) insurance companies have been woefully slow in processing flood insurance claims and my office has received numerous complaints about slow processing time and subsequent delays in receiving individual assistance.”

With winter fast approaching, making recovery and rebuilding work more difficult, there are still outstanding insurance claims that have yet to be processed, Schumer said.

Nearly Half of the Claims Yet to be Processed

Preliminary data, compiled by Federal Emergency Management Agency and based on surveys of flood insurance companies, suggests that as of two months after the storm, nearly half of the claims from Irene and Lee had yet to be processed, Schumer said.

In some cases, he noted, this processing delay has blocked the delivery of FEMA’s individual assistance because before FEMA will send funds to homeowners and businesses, that individual or company’s flood insurance claim must be processed and paid out by their provider. FEMA cannot provide individual assistance to cover damages that are already covered by an individual or business’s flood insurance policy.

Senator Demands Public Report From Insurers

In order to spur the companies to move quickly, Schumer is demanding that they provide a public report detailing the number of claims that were filed as a result of the storm, the number of those claims that have been processed, and the average time that each completed claim took to process.

“Plodding flood insurance providers can be a fly in the ointment that holds up the prompt delivery of desperately-needed federal aid,” said Schumer.

“In order for FEMA to be responsive and put money on the ground, the private flood insurance firms must move more quickly to process and approve claims from those families and businesses that were harmed by these devastating storms. With winter bearing down and communities still reeling from Irene and Lee, the insurance companies need to get a move on and get out of the way so that FEMA aid can reach those that need it the most.”

FEMA conducted a survey of flood insurance companies, collecting the outstanding number of claims during the first two months following the storm.

Data provided to Schumer’s office last week shows that flood insurance companies received 14,500 claims related to damage from Tropical Storm Irene, but only 62 percent had been processed. Tropical Storm Lee caused 3,150 policyholders to file claims with their flood insurance provider, and as of the most recent data, only 49 percent have been closed.

In his letter to insurers, Schumer said that the Schoharie County Treasurer, for example, has been renting an apartment for several months while he waits to learn how much money flood insurance money he’ll receive to rebuild his house. “Other families in Schoharie huddle together in makeshift homes, spending the holidays with strangers and wondering if and when their insurance companies will stop the delays and pay out flood insurance money that is rightfully theirs.”

“Irene and Lee were so powerful that both private insurance and federal disaster assistance are absolutely vital. Insurance companies need to pay out their policies to homeowners so that they get that assistance, but they also need to process these claims quickly so FEMA can step in and provide individual assistance to eligible homeowners.”

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