FEMA Sends Out 1st Round of Letters Offering to Review Sandy Flood Claims

The Federal Emergency Management Agency on Monday mailed out its first round of letters to the National Flood Insurance Program policyholders who filed Superstorm Sandy-related claims, asking whether they want their claims reviewed.

FEMA is mailing its letters beginning Monday in batches by ZIP codes over several weeks to nearly 142,000 policyholders who filed Sandy-related claims. The policyholders will have 90 days from the date of the notice to contact FEMA if they decide to initiate the review process.

The NFIP has paid out more than $3.5 billion in flood insurance claims to policyholders whose homes were damaged or destroyed. However, the program has drawn scrutiny in recent months after allegations of fraud involving how some insurance companies assessed damage after the October 2012 storm. Insurers have denied wrongdoing.

“The Federal Emergency Management Agency’s (FEMA) National Flood Insurance Program (NFIP) is offering you the opportunity to have your Hurricane Sandy flood insurance file reviewed if you believe that we underpaid your claim,” the letter begins. FEMA provided a copy of the letter to Insurance Journal.

“After we receive your request, a case worker who is a highly skilled NFIP-certified insurance adjuster will work with you to review your file, examine any additional information you submit, coordinate inspections by an adjuster or engineer (if required), and determine if the NFIP should make any additional payments to you for losses covered under your Standard Flood Insurance Policy,” the letter states.

FEMA says once the policyholder submits a request, it should take the case worker less than 90 days to complete the review.

The letter notes that if the policyholder doesn’t agree with the outcome of the case worker review, the policyholder will have the opportunity to request that an expert third-party neutral talk with the policyholder and review the file to help resolve the claim.

“This neutral party will then make a recommendation to FEMA about your claim. FEMA will give substantial weight to the neutral party’s recommendation,” the letter states. “If the final review supports additional payment under your policy, then your insurance company will issue a check for the additional funds.”

Commenting on FEMA’s letter and the claims review process, U.S. Senators Bob Menendez and Cory Booker, D-N.J., issued a statement urging Sandy victims who filed flood insurance claims and feel they were underpaid to participate in the review process.

“While the wait has been far too long, starting today, all Sandy victims with flood insurance will have the opportunity to get what they were entitled to so they can finally end this nightmare and move on with their lives,” Menendez said in a statement Monday.

“It’s unacceptable that victims of Superstorm Sandy’s devastation are still fighting to get what they rightfully deserve from their insurers,” said Booker. “Every New Jerseyan who filed claims with NFIP and feels they were underpaid should follow the instructions they will soon receive in the mail.”

In its letter, FEMA explains a few points that the federal agency wants the policyholders to know before choosing to participate in the Sandy claims review. They include the following:

The following is a copy of the letter: