Got Questions About Reopening Your Flood Insurance Claim?

Do you have questions about reopening your flood insurance claims? We give you a discussion of some of the most important questions we’re hearing from NJOPers. We hope these will serve to remind you that you’re not alone and help you make a decision about what to do.

It’s tempting to stick our heads in the sand and duck another round of paperwork, or more encounters with bureaucracies that treat us like a number. But don’t just run out the clock and not decide. Figure out what’s best for you and your family, and feel free to use resources available to get your questions answered.


Why should I reopen my claim?

It is a question of economic justice. There are private insurance companies that have become part of our National Flood Insurance Program who figured out how to game the system to their advantage and leave us out in the cold. Those companies fraudulently doctored engineering reports to cheat people out of insurance settlements they deserved, that could help get them home, and make them whole.

Senators from New York and New Jersey joined together to pressure FEMA to address the problem. In response, FEMA agreed to reopen all 146,000 Sandy claims for review.[1]

If you believe your flood insurance settlement was low – and so many were – you can reopen your claim with the hope of getting additional funding you deserve. While the outcome of this second bite at the apple is not assured, many people may decide to give it a try.

What will the process be like?

Perhaps you got a letter from FEMA inviting you to reopen your claim. BUT! If you didn’t that’s okay too. You can call this number right now 1-866-337-4262 to get in to the review. Don’t wait. As long as you are a Sandy victim who feel you were underpaid by your flood insurance and are not litigating over your claim, you can make the call.

  • It will be easier before you call if, gather up your flood insurance carrier name, policy number at date of loss, date of loss, address of property that was damaged, and current mailing address and telephone number.
  • A case worker, who is a certified flood-insurance adjuster, will review your file and any additional information you can provide.
  • This adjuster will decide how much, if any, of an additional payment you could receive. This determination should take no more than 90 days from the day the day you submit your request.
  • IMPORANTLY, if you are unhappy with the adjuster’s decision, you can request a neutral third-party reexamine the evidence. Definitely take advantage of this if you do not like FEMA’s decision, as this is a one-time chance to have a retired judge, law professor, or other qualified “neutral” person review your case.
  • If the results of the review support additional payment, FEMA will direct the insurance company to issue payment to you, and notify the you by letter.
  • FEMA will complete a duplication of benefit analysis to determine your eligibility to accept additional federal funds. If you also received Sandy-related disaster assistance from another source such as the U.S. Small Business Administration (SBA), the Department of Housing and Urban Development (HUD), or one of HUD’s state or local grantees such as New Jersey’s Reconstruction, Rehabilitation, Elevation, and Mitigation (RREM) Program FEMA will notify those other parties to make sure that there are no duplications. More on that further down.

opens in a new window“Read FEMA’s letter to “lowballed” Sandy policy holders, Russ Zimmer, Asbury Park Press, May 20 2015
opens in a new windowPress Release: Menendez, Booker to NJ Sandy Victims: Check Your Mailbox for FEMA Claims Review Letters May 18 2015

What if I am in the RREM program, is it worth it?

Again, that’s your decision to make. You’ve probably read or heard the DCA say if they find what is called a “duplication of benefits” for people in RREM who reopen their claims, the duplication would go back to the state, not to the homeowner. So it’s possible funding FEMA says you’re entitled to would actually be subtracted out of any check you get and go directly to the state. HOWEVER, many people in the RREM program will have the chance to keep a lot of, if not all, of the additional funds they might get through his review, or at least have those funds pay off an SBA loan or mortgage.

For example:

  • If you have an SBA loan, new money from the claims review process will go towards paying off that loan first.
  • Contents coverage awards you can keep. That is, if FEMA determines through this review process that you are owed more for contents (assuming you had contents coverage), you will never have to pay back that contents award to the State.
  • People who have an unmet need on their scope of work with RREM have the potential to get that unmet need to go to them, and not back to the DCA. In other words, your RREM grant and original flood insurance (as well as any charitable contributions specifically for rebuilding) are still below your project costs, you’ve got space to absorb new money from this claims review process without having it be considered a duplication of benefits
  • If you paid for your own adjuster or engineering firm, that cost can be protected from any duplication of benefits. (For example, if you paid a total of $5,000 for engineers and adjusters, if FEMA awards you money through this process, the first $5,000 is definitely yours to keep.)
  • There are other potential categories of money that will be protected from duplication of benefits or at least will go towards paying off a debt you already owe.

The moral of the story is: be aware of Duplication of Benefits, and if you are in RREM or have an SBA loan, definitely ask FEMA about it throughout the process. Depending on your situation, you might be able to keep some, most, or all of any additional funds FEMA might award you.

Senator Menendez’s Office

What if I have an SBA Loan:

We’re told that any additional award you might get would go to pay down the SBA loan. Good news, you would owe less on the loan! Bad news, you wouldn’t have additional cash in hand if you needed it immediately for construction until that loan is paid off.

Senator Menedez’s Office.

If I get more money, or reopen my case, will I then become ‘substantially damaged?’:

You might be worried that getting the pay you are owed might would then increase your original damage assessment to above 50%. That would mean that in many cases you’d be in a different category with height requirements.

FEMA states that it will provide, in writing, a commitment that any supplemental flood insurance payment received through the claims review process will not be factored into the calculation to determine if the property was “substantially damaged.”

opens in a new windowPress release, Menendez Gets Renewed Commitment for Reform from New FEMA Flood Insurance Chief , June 17th 2015

Will I end up owing money?

This is where getting some free advice might be helpful on a case by case basis. But FEMA stated that no Sandy survivor receiving additional insurance money would be obligated to write a check to the state or any other entity that previously provided them assistance. They plan to do a duplication of benefits analysis up front before the claims review is completed, subtracting out from the check the homeowner receives anything they might owe because of duplication of benefits, as well and providing the homeowner the opportunity to decline the award before receiving additional funds.

opens in a new windowPress release, Menendez Gets Renewed Commitment for Reform from New FEMA Flood Insurance Chief , June 17th 2015

Should I pay a lawyer?

Some people feel very strongly that everyone should. Other people feel very strongly that the free legal assistance offered by non-profits is plenty. Here are both arguments.

People who are hiring lawyers say: This process has been tough at every turn. I want a professional advocate who is in my corner fighting for me. And giving them 30% of whatever I get is fine, given that is money I wasn’t even expecting to get.

People who are working with no-cost legal advocates and lawyers: These lawyers who are sending me letters and calling me are trying to get 30% just for making a phone call for me. FEMA has admitted they were wrong, and has been pushed to set up a process that is simpler for us to navigate. Because of that, I want to keep as much of the award as I can and will work with free help that is being offered. Losing that 30% could be the difference between me getting home or not getting home.

In the end, remember, this is not a lawsuit. It’s a second bite at the apple, a second chance.

Should I just burn all my paperwork from the last two years and go live in the Pines?

(Maybe. Bonfire could be nice. Keep the bugs away while you look at the stars.)

In all seriousness, there are a number of people who are just done, or close to done, and don’t want to rock the boat or mess things up. Bonfire or no bonfire, they may not reopen their claims.

It’s your decision. All we’re asking is that you please consider, do some research, and decide what is best for your family.

If don’t want to give FEMA any more documents, you can always just call the number and ask them to look one more time at your case with fresh eyes.

Here is the contact information for the free legal assistance:

Volunteer Lawyers for Justice: (973) 645-1955. VLJ’s telephones are open Monday-Thursday from 9AM-12PM and from 1PM – 4:30PM
Legal Services of New Jersey: 1-888-576-5529

Until we’re all home,

Lisa, Sandi, Chuck and Amanda

[1] opens in a new window