The Federal Emergency Management Agency has tentatively settled insurance claims with 160 Superstorm Sandy victims, who allege engineering firms altered damage estimates. Meanwhile, lawyers say roughly 200 new policyholders say their reports were also changed.
FEMA manages the National Flood Insurance Program which, allows people to buy flood insurance from the federal government.
Over the last several months, FEMA has been responding to complaints that private insurance companies contracted by the National Flood Insurance Program changed engineering reports to show homes were not damaged by the 2012 storm.
Talks between FEMA and Superstorm Sandy Victims are being moderated by a panel of federal magistrates in New York.
The homeowners who have submitted settlement agreements to the court represent about a tenth of all the policyholders in litigation. Lawyers said those settlements are the most egregious examples of engineering companies fabricating reports to show little to no damage.
But they add most homeowners don't even know they were shortchanged.
"I think there are thousands of people out there who need to pull out their engineer's reports, look at the claims documents, and see if their claims were either lowballed or denied," said Bill Kelly, a lawyer representing roughly 700 Sandy homeowners.
Kelly and others are in talks with FEMA to reach a global agreement to reopen anywhere from 10,000 to 140,000 Sandy claims.
Insurance companies deny all wrongdoing and say they were merely following FEMA's rules.
