"I've told an adjuster that based on our guidelines that I need you to remove these items," he says. He says that put pressure on him to get the independent adjusters in the field in line to back up these conclusions, or else their flat fee was at stake. They told him to pay homeowners less than what they asked to be paid to rebuild, he said. 'Sorry your house looks like it shifted to the left a little bit, but I think it was like that when you bought it,' " Coolidge said. The insurance firms he worked for used phrases like "pre-existing," "earth movement" or "ground settlement" to reject homeowners' claims of flood damage. He says he quit his job in part because he was so bothered by what he was doing. Jeff Coolidge reviewed adjusters' files for multiple insurance companies after Superstorm Sandy. So did several others who worked closely with the insurance companies after the storm. Every single change they made reduced the cost."ĭozens of homeowners we interviewed described something different. "There was so much money spent on Katrina, the insurance companies paid out so much that there was a noticeable sea change in the attitude of the insurance companies going forward," he says. But after Hurricane Katrina destroyed much of the Louisiana and Mississippi coasts in 2005 - and became the most costly storm in U.S. 'A Noticeable Sea Change' In Insurer Attitudesĭavid Charles, an insurance adjuster who represents homeowners, says he had always loved his job and never had any problems with insurance companies. Life in the neighborhood continues on around the empty lot where Doug Quinn's house used to stand in Toms River, N.J.Īnd yet in the months and years after Superstorm Sandy, hundreds of homeowners in New York and New Jersey filed lawsuits claiming that not only were they shortchanged by their flood insurance, but they were cheated. In theory, homeowners shouldn't be shortchanged because the insurance companies are only acting as a middleman between FEMA and the homeowners making claims, essentially contracting with the government to evaluate damage and assess compensation. When that money runs out, as it has during big disasters in recent years, taxpayers pay the rest. They then pay homeowners using the pot from the program. ![]() After a disaster, the insurance companies that participate in the flood program decide how much a homeowner will receive. It goes into a pot of money to the flood program. When homeowners buy flood insurance, they pay a fee that doesn't actually stay with the insurance company. It pays private insurance companies fees to do that work. But it doesn't write the policies or manage the claims. Some got just a fraction of their policies.įEMA runs the government flood program. Thousands of homeowners across New York and New Jersey were underpaid. If it was a game, he wasn't the only player. "I did not realize that the game was stacked against us and there really was no way to win." "I knew right off the bat that something was wrong," he says. To understand the challenges homeowners are facing, we set out for Toms River, N.J., where Quinn's house used to be. That includes overhauling its contracts with private insurance companies and assigning a person to help policyholders through an appeals process. "Because when I go back and look, while we were providing oversight, it was not enough."Īnd after our reporting, FEMA announced Monday it will include more transparency in and oversight of the National Flood Insurance Program. ![]() He acknowledged that the program does not provide enough oversight of the firms. "What I can tell you is that I am focused on those policyholders and insuring that they get the resources and the payouts they are entitled to," said Roy Wright, who runs FEMA's flood program. Government auditors asked the Federal Emergency Management Agency seven years ago to impose stricter oversight of the program, including insurers' profit margins. Still, FEMA's top flood official acknowledged that the program needs fixing and told NPR and Frontline that he is pursuing reforms. "The federal government determines what the appropriate payment is." ![]() "This is a fee-for-service operation," said Hartwig, president of the Insurance Information Institute. "It is always going to be the case - in the event of a major catastrophic loss where hundreds of thousands of people will have seen damage or complete destruction of their property - in some instances that they will believe they are due more than in fact the claim was ultimately adjusted for," he said.
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