Schumer, Gillibrand Announce FEMA Fixes To Help Homeowners Fallen Victim To Flood Insurance Process That’s Stacked Against Them
Major Actions Come After Months of Effort, Pursuit By Schumer, Gillibrand, Menendez and Booker
United States Senators Charles E. Schumer and Kirsten Gillibrand today announced a critical commitment they received from the Federal Emergency Management Administration (FEMA) to take major actions to help homeowners still struggling to rebuild their homes by increasing transparency, fairness and credibility within the National Flood Insurance Program (NFIP) claims process. Senators Schumer, Gillibrand, Menendez and Booker met with FEMA Administrator Fugate this week to push for many of these changes.
“It is of the utmost importance that Sandy victims receive prompt reimbursement from flood insurance providers based on the damages incurred to their property, end of story. I’m pleased FEMA has heard our call and started to take the critical steps to rectify several roadblocks to a fair claims process,” said Senator Schumer. “New York policyholders should not be flatly denied claims based on trivial deadlines; should not be shortchanged due to backwards incentives for insurance providers; and do deserve an office within FEMA to help advocate on their behalf when the insurance claims process turns sour. These changes by FEMA will mean significant progress to ensure that homeowners can receive the critical funding that they deserve.”
"This is finally some good news for these families devastated by Superstorm Sandy that FEMA will take some concrete steps to provide greater transparency for Sandy survivors and cut bureaucratic red tape that has blocked hundreds of families from much-needed help," said Senator Gillibrand. "I thank Administrator Fugate for listening to us and ordering insurance companies to comply with a judge’s order to turn over all documents relating to engineering reports to the public and for doing the right thing for families whose appeals were dismissed. We will continue to push to ensure that New York families get the help they need and deserve."
The announcement comes just two days after the Senators met with FEMA Administrator Craig Fugate to press again for reforms in the NFIP claims process.
The Senators outlined the main problems with the NFIP claims process and major actions FEMA has committed to take:
1) Unbalanced Penalty Structure
Problem: Unbalanced penalty structure that penalizes Write Your Own (WYO) insurance companies for making overpayments disproportionately more than underpayments, leading to systemic underpayments.
FEMA’s Action: Administrator Fugate has committed to take administrative action to level the penalties levied against WYOs for underpayments and overpayments. He has asked Sen. Menendez to convene a task force composed of Congress, FEMA and WYOs to find the right balance while ensuring over-and-underpayments are penalized equally. The first meeting of this Task Force will convene within weeks.
2) Appeals Deadline Hypocrisy
Problem: Hypocrisy by FEMA to dismiss 270 claims because the policyholder missed a deadline, yet FEMA failed to comply with its own deadlines to respond to appeals.
FEMA’s Actions: Administrator Fugate has committed to reopen and consider the appeal of 270 policyholders who suffered damage from Sandy and had their appeal dismissed because they missed a FEMA deadline.
3) Robust Flood Insurance Advocate
Problem: The need for a comprehensive, flood insurance advocate that will assist policyholders with the claims process, not limited to maps.
FEMA’s Actions: Administrator Fugate once again renewed his commitment to ensure that the flood insurance advocate authorized by the Homeowners Flood Insurance Affordability Act (HFIAA) would be robust and comprehensive, helping policyholders navigate through the claims and appeals process in addition to map revisions.
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