Hurricane Sandy flood victims that filed insurance claims have been described as “severely underpaid” as a result of the sheer amount of claims filed.
Additionally, fraud allocations and poorly handled claims have been reported. On June 23rd the Senate Housing and Urban Affairs Committee held a hearing to evaluate the National Flood Insurance Program (NFIP) reform in response to bipartisan concerns over whether structural flaws led to underpayment of flood claims. Ranking Member Sherrod Brown (D-OH) opened, “hitting one of the most densely populated regions of our country, Sandy resulted in over 100 deaths, became one of the most costly storms in our history.” After Hurricane Sandy, NFIP had over 144,000 claims and paid nearly $8 billion to help property owners rebuild their homes and businesses.
Dr. Christopher Ford, Director of the Center for Technology and Global Security, led the NFIP reform evaluation and found “no pattern of underpayment,” but stated too many claims were handled in too little time. Dr. Ford recommended NFIP should focus on reducing incidence of errors, improving capacity for error correction, and improving overall flood management to improve preparations for future events.
Chairman Richard Shelby (R-AL), stated there are “still a lot of unanswered questions here, this is just the beginning,” and stated that he fully intends to “follow up on the recommendations made in the report.” Chairman Shelby concluded the hearing by acknowledging NFIP flaws and asked FEMA’s Administrator to appear before the committee soon.