Officials: Sandy victims with rejected insurance should apply to state

Long Islanders facing rejected flood insurance claims for rebuilding Sandy-damaged homes because of the little-known "earth movement exclusion" should apply to the state's New York Rising housing program for grants, program officials said Tuesday.

Jon Kaiman, the former North Hempstead Town supervisor who now is the governor's special adviser for Long Island storm recovery, and Seth Diamond, New York's director of storm recovery, said the program continues to take applications -- with no deadline set -- and urged people to apply.

They also said grants of up to $50,000 are available to eligible homeowners to elevate storm-ravaged homes.

Kaiman said the program has received 10,000 completed applications from Long Islanders seeking funding. As of the end of October, 4,700 award letters had gone out, totaling almost $500 million in grants, he said. The average individual grant is $112,000, officials have said.

Kaiman and Diamond, in a presentation before the Long Island Regional Planning Council, reiterated an announcement Gov. Andrew M. Cuomo made in September, saying homeowners whose flood insurance claims were denied by the Federal Emergency Management Agency because of the exclusion would be fully compensated.

"We are covering for earth movement," Diamond said in response to a question from planning council chairman John Cameron. "I think there's been some confusion."

The National Flood Insurance Plan pays for damage caused by a surge of water that scours around foundations or undermines a slab, directly damaging the foundation. It does not, however, cover "earth movement," which includes destabilization caused by nearby flooding, FEMA has said.

Kaiman, using a hypothetical example to illustrate NY Rising's role to "fill the gap," said if a person's home sustained $200,000 in damage and the homeowner received a partial payout of $90,000 from the insurance company, "we then pay out $110,000 with CDBG funds. They are made whole."

He explained, however, that the federal Community Development Block Grant funds, which come from the U.S. Department of Housing and Urban Development, are governed by rules that there can be no duplication of funding. CDBG awards deduct other grants, loans and insurance settlements homeowners have received.

"You're supposed to use other resources before you get to us," Kaiman said.

Kaiman, a former planning council member, acknowledged that some Long Island homeowners think NY Rising's valuation of rebuilding costs, put at $160 per square foot, is too low. He said there is "limited" money, and the goal is to help people with few resources.

Michele Mittleman, an attorney who founded the grassroots group Sandy Victims Fighting FEMA after the storm destroyed her Freeport home, complained that NY Rising isn't living up to Cuomo's pledge to fully compensate people facing the earth movement exclusion.

"If the governor said he would fully compensate us, he should give us our flood insurance maximums, and then more New York Rising money if there are additional needs," she said in a phone interview.

"We're not taking on the role of the insurance company," Kaiman said in response. "But in terms of damage to the house, New York Rising is paying for the reconstruction of the home."

He added the money doesn't necessarily help homeowners "build to the same status the house they once may have had," citing such high-end items as pools and granite countertops that grants would not cover.