The Federal Emergency Management Agency is now responding to a flood of law suits from hundreds of Hurricane Sandy victims whose insurance claims have been denied, reported Bloomberg News reports.
Private insurance companies that work in partnership with FEMA's National Flood Insurance Program have come under scrutiny over allegations that they denied or rejected damage claims based on falsified reports.
About 1,500 cases over flood claims from the 2012 Category 3 hurricane remain pending in New York and New Jersey federal courts, and now FEMA is scrambling to settle many of those claims.
Brad Kieserman, deputy associate administrator for insurance at FEMA, disclosed the settlement talks during a break at a hearing in Brooklyn, New York, federal court Wednesday over whether an insurer, Wright National Flood Insurance Co., concealed from a homeowner the existence of conflicting reports over damages.
During the hearing, witnesses testified over the handling of a report for a Long Beach, N.Y., homeowner, Deborah Ramey who alleges that a rental property she owned was severely damaged by the flood yet was falsely described as having had long-term damage by an engineer working on behalf of the insurer.
"We are going to consider all of them," said Kieserman regarding the long list of claims. He added, the agency may also look at settlements with homeowners with disputed payments who didn't sue.