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Shake-Up at NFIP; FEMA Reopens Sandy Claims

Amidst the resignation of the Federal Insurance and Mitigation Administration's associate administrator, FEMA announced it is reopening all NFIP claims related to Superstorm Sandy due to alleged mishandling.
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Late last week, David Miller, Federal Insurance and Mitigation Administration (FIMA) associate administrator, abruptly resigned from his position. FIMA is the government agency tasked with running the NFIP.

Miller had led FIMA since 2011 and was the lead NFIP government official during turbulent times for the program. In 2012, the NFIP faced implementation of Biggert-Waters and in 2014 underwent further changes when President Obama signed the Homeowner’s Flood Insurance Affordability Act of 2014 into law. Additionally, the NFIP has recently faced increasing scrutiny for its handling of Superstorm Sandy claims, including allegations of altering engineering reports to lower claims payments for NFIP policyholders. Law enforcement agencies continue to investigate the claims handling in addition to ongoing court cases. It is unclear who will replace Miller as head of FIMA.

Amidst Miller’s resignation, FEMA also announced it is reopening all Sandy NFIP claims due to the alleged mishandling. In a letter to WYO companies, FEMA asked for information on all claims during Oct. 27-Nov. 6, 2012, including expenses for engineering companies.

FEMA will first examine claims filed by about 15,000 homeowners who had engineering reports conducted on their homes. After re-examining those initial 15,000 filings, the agency will turn its attention to the remainder of the 141,800 Superstorm Sandy damage claims filed by policyholders in the Northeast. If, after a review, FEMA finds the policyholders to have received less in compensation than would have been appropriate, they could receive more money from the NFIP up to the maximum of $250,000 for their property and $100,000 for dwelling contents.

John Prible is Big “I” vice president of federal government affairs.