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FEMA Begins Flood Insurance Review Process Stemming From Fraud Reports

May 18, 2015
Press Release

Notification Process Follows Pallone Letter Calling for Notification to Flood Insurance Policyholders

WASHINGTON, DC – The Federal Emergency Management Agency’s (FEMA) National Flood Insurance Program (NFIP) today announced that it has begun a process requested by Congressman Frank Pallone, Jr. (NJ-06) to review flood insurance claims filed by policyholders affected by Hurricane Sandy.  In March, Pallone sent a letter to FEMA requesting that it establish a process allowing homeowners to easily file an appeal if they believe they have been a victim of an intentionally altered engineering report.

Allegations surfaced earlier this year that private insurance companies denied the flood insurance claims of thousands of homeowners affected by Hurricane Sandy because of fraudulently altered engineering reports.  In addition to the letter, Pallone recently met with Brad Kieserman, Deputy Associate Administrator for Insurance at FEMA, to discuss the allegations.  In the meeting, Pallone stressed the importance of FEMA establishing a notification process in a timely fashion and the need for adequate staff to address corrective action. 

“I am pleased that FEMA has moved forward to inform Sandy victims about the widespread fraud related to engineering reports connected to flood insurance claims and to ensure the victims get the resources they are rightfully owed,” said Congressman Pallone. “Sandy victims have already suffered enough, and I thank FEMA for responding to my letter with swift action.”

FEMA will send a letter to all NFIP policyholders who filed flood insurance claims pursuant to Hurricane Sandy. Policyholders who incurred losses from Hurricane Sandy from Oct. 27, 2012, through Nov. 6, 2012, and want their claim reviewed may contact FEMA.  Letters will be sent on a rolling basis in the coming weeks.

As of May 15, 2015, 74,052 NFIP claims had been filed in New Jersey stemming from Sandy damage.  Many Sandy victims are suing their insurance companies for perceived underpayments or denials, but the vast majority of those who have filed NFIP claims are likely unaware of the recently uncovered fraud in which engineering reports have been intentionally doctored.

The letter Pallone wrote to FEMA in March can be read HERE.