FEMA Orders Flood Insurance Program Revisions

Superstorm-afflicted homeowners beating their heads against a flood-insurance wall can expect some relief soon.

FEMA says it will broaden transparency and credibility in National Flood Insurance Program (NFIP) claims procedures, in response to pressure from U.S. Senators Robert Menendez and Cory Booker (D-NJ) and Charles Schumer and Kirsten Gillibrand (D-NY).

According to information from Menendez's office, the Senators met with FEMA Administrator Craig Fugate two days ago. Menendez has been on the warpath for three months. Representatives Frank Pallone (D-6) and Bill Pascrell (D-9), whose districts engaged considerable damage, added their influence.

The delegation extracted remedies in four core areas:

Unbalanced Penalty Structure

As it stood, underpayments became chronic among Write-Your-Own (WYO) insurors that were penalized for issuing a high rate of overpayments, the lawmakers said. Fugate commissioned Menendez to organize Congressional members and representatives of WYOs and FEMA into a task force to rectify the penalty structure. The Senator says it will convene in a matter of weeks.
 
Altered Engineering Data

WYOs sought engineering reports that would reflect damage data favorable to lower reimbursements and ignored a New York Magistrate court order to provide policyholders with contradicting assessments, the lawmakers said.  Fugate ordered all New Jersey WYOs in NFIP to issue all engineering information, including revisions, in line with the ruling.

Appeals Deadline Discrepancies

FEMA dismissed 270 claims on the basis of late filings, yet failed to meet its own deadlines to respond to appeals, the lawmakers said. Fugate agreed to consider the 270 appeals in question.

Flood Insurance Advocacy

The system lacks a "comprehensive flood insurance advocate" to help policyholders with claims, the lawmakers said. Fugate promised to a "robust and comprehensive" advocate authorized by the Homeowners Flood Insurance Affordability Act (HFIAA).