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Underpayment on FEMA flood insurance after Superstorm Sandy

Jim Hoffer investigates.
February 27, 2014 3:11:47 PM PST
In an earlier report, the Investigators showed how FEMA, which is billions of dollars in the red has been squeezing homeowners on their Superstorm Sandy flood insurance claims.

Nearly a year-and-a-half after Sandy hit, thousands of people have yet to move back home. Our investigation has found one of the biggest reasons why - underpayment on flood insurance by FEMA.

"Each folder is a separate person, a separate household," said Benjamin Rojotte of the Disaster Relief Clinic.

So far 1,500 families have come to the clinic seeking help saying they feel as if they have been shortchanged.

"You know, there's something fundamentally wrong when a flood insurance policy that's meant to protect you winds up working against you," Rojotte adds.

The homeowners came to the clinic for help in fighting FEMA, who they believe has stiffed them when they most needed their help.

"My family is a little broken, because it's hard to go through something like this," said Long Island resident Whitney Luther.

Luther and her children have yet to move back home. FEMA only awarded her $97,000 for repairs even though she had several estimates showing it would cost more than twice that.

"It made me feel like a criminal because I wanted to get the money that I'm entitled to repair my home," adds Luther.

They have all paid their premiums and they all thought they would be covered for $250,000 if a storm hit.

Susan Goldstone is no closer to getting back into her home than she was days after Sandy hit.

When asked whether there were hopes of getting back in there, she said she doesn't have good hopes.

Goldstone and hundreds of others have turned to the Disaster Relief Clinic for help in appealing their FEMA claim, but it takes months, and few end with the homeowner getting more money.

"You have a program that's backed by the federal government, but then when you have a disaster when insurance is supposed to kick in, it's working against you. I think it's prolonging the recovery process," said Rajotte.

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