Washington, DC – After a recent news report revealed that Sandy flood insurance claims of thousands of homeowners across New York and New Jersey were being denied based on an exclusion under the National Flood Insurance Program (NFIP) managed by FEMA, U.S. Senator Kirsten Gillibrand urged FEMA to review its regulatory mandates and reverse denials for homeowners hit by Superstorm Sandy who purchased federal flood insurance and rely on critical funds to repair and rebuild their homes. Currently, a FEMA provision states that the agency does not insure property loss caused directly by earth movement, even if the movement is caused by flood.
“It is deeply troubling that damages caused by a storm of this magnitude are excluded from flood insurance policies,” said Senator Gillibrand. “We must ensure that no bureaucratic fine print stands in the way of getting Sandy-impacted homeowners fully back on their feet. Our New York homeowners who suffered damages from the storm deserve the needed resources to repair and rebuild their homes.”
Senator Gillibrand wrote in a letter to FEMA Administrator Craig Fugate, “It is unacceptable for the Federal government to use such loopholes to deny responsible homeowners the benefits that they have paid for through their insurance premiums. To deny these claims pulls the rug out from underneath homeowners who are relying on their flood insurance policies to repair and rebuild their homes, now nearly eight months after Sandy hit our shores…I request that you immediately review the regulatory requirements for FEMA’s standard flood insurance policy and reconsider the denials that have been issued to homeowners based on the ‘earth movement’ exclusion.”
According to a recent news report, thousands of homeowners with flood insurance, including a New Jersey family who noticed clear cracks in the foundation of their home, found that their Sandy flood insurance claims were denied due to the “earth movement” exclusion. According to FEMA’s standard flood insurance policy, which is listed under the U.S. Code of Federal Regulations, the agency does not “insure for loss of property caused directly by earth movement even if the earth movement is caused by flood.” Senator Gillibrand called for a comprehensive review of this provision and to reconsider the rejected claims for homeowners who desperately need relief.
Full text of Senator Gillibrand’s letter is below.
Dear Administrator Fugate,
I am writing to express my complete dismay at recent reports that potentially thousands of homeowners in New York and New Jersey are being denied claims by FEMA for damage to the foundations of their homes as a result of flooding caused by Superstorm Sandy. I understand that these denials are based on a provision in FEMA’s standard flood insurance policy, which is found in the U.S. Code of Federal Regulations (44 CFR, Part 61, Appendix A), that states that FEMA does not insure for loss of property caused directly by earth movement even if the earth movement is caused by flood.
It is unacceptable for the Federal government to use such loopholes to deny responsible homeowners the benefits that they have paid for through their insurance premiums. To deny these claims pulls the rug out from underneath homeowners who are relying on their flood insurance policies to repair and rebuild their homes, now nearly eight months after Sandy hit our shores.
While I understand that flood insurance policies cannot cover every single loss that was incurred as a result of Superstorm Sandy, damages that were a result of storm surge and encroaching flood waters should not be excluded from flood insurance policies. To address this issue, I request that you immediately review the regulatory requirements for FEMA’s standard flood insurance policy and reconsider the denials that have been issued to homeowners based on the “earth movement” exclusion. I also request that you keep my office informed of the status of this request, and the actions that FEMA plans to take to address these concerns.
Thank you for your attention to this urgent request.