FEMA Official to Testify on Flood Insurance Increases

Craig Fugate, administrator of the Federal Emergency Management Agency (FEMA), will testify at the U.S. Senate Banking Committee hearing on increases to flood insurance premiums under the National Flood Insurance Program next month, the office of Sen. David Vitter, R-La., announced last week.

Vitter will bring Fugate to the committee as a key witness at the hearing, likely to be held Sept. 18, and among the issues he plans to raise to Fugate and the Obama administration is his demand that FEMA rescind their flood maps in Southeast Louisiana until their mapping issues are resolved, according to insuranacenewsnet.com.

Said Vitter:

"Earlier this year, FEMA caused panic in many parishes in south Louisiana in part by predicting future flood insurance rates based on incomplete and inaccurate maps, and the man in charge of administering this program needs to explain the challenges resulting from the implementation of Biggert-Waters. The flawed flood maps put communities affected under the gun, and the result could be that they will have to bear the cost of FEMA's mistakes for years to come."

Meanwhile in New York, a number of Sandy victims, including a Long Beach couple, plan to rally at the Theodore Roosevelt Executive and Legislative Building in Mineola on Aug. 29 to ask elected officials for support to challenge FEMA to change a particular provision.  

The National Flood Insurance Program, which FEMA manages, has a provision that states that property loss caused by earth movement, even if it is the direct result of flooding, is not covered.

U.S. Sen. Kirsten Gillibrand has called on FEMA to revisit and reverse the denied claims of homeowners who are relying on their flood insurance policies to repair and rebuild their homes.

“It is deeply troubling that damages caused by a storm of this magnitude are excluded from flood insurance policies,” Gillibrand said in a statement. “We must ensure that no bureaucratic fine print stands in the way of getting Sandy-impacted homeowners fully back on their feet.”

In Long Beach, Ron and Debbie Gialanze plan to join the rally in Mineola next week and have hired an attorney to challenge FEMA on the earth movement provision after the foundation of their East Pine Street home was damaged in Hurricane Sandy and their insurance company, Fidelity, refused to pay the full value of their $250,000 flood policy, based on the earth movement provision, according to the Long Beach Herald. Debbie, who has been displaced with her husband since the October storm, said:  

“You figured all those years — and we never put a claim in, not even for Irene — that we’d be OK. Now, when we’re ready to collect on it so we can move forward, they’re like, ‘No, sorry.’ They’re not going to give us money for structural damage because of that loophole in our flood insurance policy saying that it’s earth movement.”

FEMA spokesman Dan Watson said in a statement that the agency administers the National Flood Insurance Program at the discretion of Congress and by law the Standard Flood Insurance Policy only covers direct physical loss to buildings by flooding:

"For instance, damage caused by the surge or flow of floodwater can scour around foundations or undermine a slab, directly damaging the foundation. By law, the SFIP does not cover earth movement, including destabilization caused by nearby flooding."

Watson noted that when an insurer denies a claim or any part of a claim, the policyholder may also appeal that denial directly to FEMA.