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FEMA Outlines Flood Insurance Reforms

AP Photo/Jessica Hill

The Federal Emergency Management Agency (FEMA) has begun revealing details on how it will reform the National Flood Insurance Program.

FEMA oversees the program, which allows people to buy flood insurance from the federal government.  The agency contracts private insurance companies to process claims and payouts through the program.

FEMA's talk of reform follows weeks of criticism that the private insurance companies who administer the program underpaid homeowners following Superstorm Sandy.

FEMA says it is looking to outside experts to help reform the program. Those experts include the American Society of Civil Engineers, The Warton Risk Management and Decision Process Center at the University of Pennsylvania, and Long Island-based Touro Law Center.

Brad Kieserman, FEMA's Deputy Associate Administrator for Federal Insurance, is heading the flood program's overhaul. In a video statement Tuesday he addressed the country's 5.3 million policyholders.

"We know that we have to make changes to this program. We are undertaking  sweeping reforms that are going to change the way we deliver the National Flood Insurance Program," Kieserman said.


Spokesman Rafael Lemaitre says FEMA's has targeted its Claims and Appeals Branch for reform.

Following Sandy, FEMA says roughly 4,000 homeowners complained of being underpaid and applied for an administrative appeal. Hardly any of those appeals were granted. Homeowners wanting to continue the dispute had to hire an attorney and sue in court. But, while homeowners had to pay their own legal fees, taxpayers paid the legal fees for the insurance companies who were widely criticized for being overly litigious.

Lemaitre says a second reform is to better manage how those insurance companies fight homeowners in court.  

In his video statement, Kieserman said FEMA's goal was to resolve disputes over allegedly fraudulent Sandy claims, but in a way where homeowners weren't involved.

To do that, FEMA has taken the unprecedented step of allow all 144,000 Sandy victims to have their cases reopened if they think they were shortchanged. That move has raised questions of the government seeking to buy its way out of responsibility for lax oversight over the private insurance companies who administer the federal flood program.

"If the program officials dictate the broad scale payment of claims and don't bother to go against the people who were corrupt, then essentially it's just a cover up," said Bill Cumming, a former FEMA lawyer.

In a letter to elected officials Tuesday, FEMA vowed not conceal any criminal activity. 

Charles is senior reporter focusing on special projects. He has won numerous awards including an IRE award, three SPJ Public Service Awards, and a National Murrow. He was also a finalist for the Livingston Award for Young Journalists and Third Coast Director’s Choice Award.
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