Why Were Homeowners Hit by Superstorm Sandy Left High-and-Dry by Their Insurers?
Follow the money trail, which leads to a most unlikely culprit – the Federal Emergency Management Agency
- Credit: Brad Horrigan/WNYC
As usual, it all comes down to money – who controls it, who needs it, who wants to keep it.
Homeowners filing damages claims in the wake of superstorm Sandy found that their insurance adjusters were under-reporting the extent of damages, often resulting in payment offers equal to half of the actual cost of rebuilding.
When homeowners filed appeals and went to mediation – hoping to at least collect a sum that was closer to the cost of repairs – the insurance companies often refused to budge from their original offer.
What was going on? Who was really to blame? How about the Federal Emergency Management Agency? It turns out that tough anti-fraud measures put into place in the aftermath of Hurricane Katrina – which include hefty fines for insurers if they overpaid claims – may have prompted insurers to under-estimate damages and claims after Sandy.
As for dealing with arbitration and lawsuits that would follow those under-estimates and under-payments – FEMA, it turns out, reimburses insurance companies for all litigation costs.
Read the, a content partner of NJ Spotlight, which focuses on the travails of a Long Island resident caught in the tangle of post-Sandy red tape.