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FEMA promises arbiter for appeals of Sandy insurance claims

An empty lot on Michigan Street in Long

An empty lot on Michigan Street in Long Beach on Thursday, Nov. 13, 2014, where a home damaged by superstorm Sandy used to stand. Credit: Johnny Milano

WASHINGTON - The head of the National Flood Insurance Program agreed Tuesday to allow an independent arbiter to participate in the process of reviewing thousands of claims from homeowners who say they were underpaid after superstorm Sandy.

During a hearing on Capitol Hill, Brad Kieserman told senators from New York and New Jersey that storm victims who opt to have their claims from the 2012 storm reopened but are unhappy with the outcome could appeal to the arbiter. Kieserman, however, will have the final decision.

"These are federal dollars," said Kieserman, the deputy associate administrator for insurance at the Federal Emergency Management Agency. "So I need to be accountable."

His comments came during the first of a series of meetings lawmakers plan to host to reform the flood insurance program, which drew broad criticism for its handling of claims after Sandy. Sen. Robert Menendez (D-N.J.) called for the summit earlier this year after the program, run by FEMA, was accused of defrauding homeowners and underpaying settlements from Sandy.

"Your government failed you, and you deserve much better," Menendez said to storm victims who traveled to Washington for the hearing.

The meeting comes as FEMA is in talks to settle roughly 1,800 lawsuits filed by homeowners claiming they were underpaid on flood insurance settlements after Sandy.

Next month, a panel of judges has called for hearings to begin on Long Island and in Brooklyn to examine allegations of fraud. And the New York State attorney general's office is undertaking a criminal probe.

FEMA, meanwhile, has agreed to establish a process to reopen claims for any of the 144,000 policyholders who were flooded in Sandy and believe they were underpaid.

Sen. Kirsten Gillibrand (D-N.Y.) said the agency needs to move faster. "How much longer do our families have to wait?" she asked. "This is not a time for business as usual."

Kieserman, who was appointed in February to reform the flood insurance program, said FEMA would begin the review process in May and said he would brief senators next week on the details.

Sen. Charles Schumer (D-N.Y.) said the agency needed to be flexible about documentation it would require for storm victims to prove what they spent to rebuild. "Homeowners should not be forced to provide original receipts from two years ago," he said.

Kieserman agreed to accept sworn statements from storm victims to prove their expenses, but he stressed that FEMA cannot simply cut additional settlement checks at will.

"I've got to have some evidence," he said. "But we are nearly three years after the storm . . . so we also need to be realistic."

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