Sandy Victims Face Claims Shortfall: Who’s To Blame?

Hurricane Sandy victims have already suffered through the tragedy of losing their homes after the 2012 storm. Now one year later, some of those same victims are being told they must foot a portion of the repair bills on their own.

Victims like John Lambert and Lee Ann Newland of Neptune, New Jersey, are struggling to repair their home after it was damaged by more than four and a half feet of water. The damage has included a need for new drywall, flooring, and a boiler, the sales tax of which was not factored in by insurance adjusters when computing the amount for claim (and should have been).

As a result, the couple is looking at a shortfall of $11,000, which it will likely receive, for just those expenses. Ultimately, Newland is trying to get the insurance company handling the claim to tack on $49,000 to the settlement. “In our case, that is the difference between us rebuilding, or not,” she told the Associated Press in recent comments.

However, Federal Emergency Management Agency (FEMA) regulations may not make the rest of this compensation feasible.

Burden Of Proof

On Tuesday, a group of Sandy victims addressed a New Jersey state panel, stating publicly that the “red tape” associated with getting a satisfactory settlement has done “just as much damage as the storm,” a report from The Berkshire Eagle stated.

Diane Mazzacca of Stafford, New Jersey, told the panel: “God forbid I have another issue, because I’m done … We are up to our limits. Our money is tied up trying to get back in our home, fighting with insurance, fighting with FEMA. Nobody has done anything to help. You’ve got to help. Otherwise I’m just turning over the keys.”

Danielle Vaz of Tom’s River, New Jersey, added: “After a year I’m tired. Instead of being a 36-year-old single mother, I feel like I’m 76. It’s not getting any easier; it’s getting harder by the day,” she said. “When I needed my government — the people I voted for — they failed me.”

Sources Of Frustration

While an influx of new adjusters were brought in to assist with the calculations, most have done an exemplary job, according to Jeff Moore, vice-president of claims for Wright Flood. Moore pointed out that “any oversights are easily corrected if homeowners can produce proof that a covered expense has been overlooked.”

Moore added that with his company, which has answered more Sandy claims than any other, around 30 percent of claimants are seeking higher settlements than what they are being offered.

Moore added that a number of homeowners were getting left with repair bills “significantly larger” than their insurance settlements, because of regulations from FEMA, which sets strict limits on what the flood program covers and is more to blame for shortfalls than miscalculated adjustments.

“In a big event, you are going to get some people entering the industry … and a percentage of those people are going to do great, because they are good people and they are smart, and they want to do a good job,” said Moore. “And there will be another percentage that don’t do so well … and those are the ones you get to write about in the paper.”

Computer technology, he added, has made it super-easy to accurately write claims, even if one doesn’t know anything about insurance or construction. “The software that they use, it’s very easy. I could take you in a day and teach you to write an estimate,” Moore said, lending more credibility to the fact that shortfalls are more of a regulation problem than an insurance company issue.

Unfortunately, unlike the transparency of insurance companies, FEMA does not keep tabs on the number of disputes it has experienced. However, they did release some numbers on what has been paid out thus far.

  • $7.8 billion total in flood program payments to policyholders
  • 92 percent of all claimants received some form of undisclosed compensation
  • Average check issuances were in the amount of $54,754

To Sum Up

Immediate disaster relief from the federal government was widely praised in October 2012 when the northeast was first hit by Hurricane Sandy.

However, the ordeal of Sandy victims, who are still trying to find a way to pay for their repair shortfalls, is a grim reminder that a natural disaster has longer lasting effects on the people involved.

As such, serving customer needs continues to be a high priority for insurers, long after the storms have passed. Companies understand this. It’s why they have added so many claims adjusters to help compensate claimants. It’s also why the industry has safeguards in place to correct any legitimate issues that may arise. With a Sandy customer satisfaction rate of more than 70 percent, even considering FEMA’s strict regulations, the majority of victims have received a prompt response to their financial needs.

For the rest, however, time will tell if FEMA is able to iron out the issues that are keeping flooding victims from full compensation.

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