After Superstorm Sandy in 2012, Kathy Hanlon's life crumbled. Her Long Beach, N.Y., home had no electricity, her family was traumatized and one of her sons was getting sick. On top of that, there was the bureaucratic maze of flood insurance.
"I cried many times because I was so angry when I got off the phone with the insurance company," Hanlon says. "It was demeaning. We had to send them things repeatedly. We had to wait for phone calls. We had to wait for people to come visit the house."
What Hanlon experienced is the private-insurance side of the flood program, in which adjustors are tasked with making sure damages are legitimate.
The National Flood Insurance Program has a public element, which helps people get money after a disaster to rebuild their homes. The private part comes when FEMA contracts with regular insurance companies.
This week, FEMA began settlement talks with homeowners devastated by Sandy, and there's a lot to resolve.
Homeowners say engineers hired by insurance companies falsified damage estimates and that the homeowners aren't being repaid for the actual damage that Sandy caused. Some are questioning whether FEMA can be a watchdog for both disaster victims and taxpayers who subsidize the federal flood program.
The problem arises when FEMA tries to protect the interests of its policy holders while it also makes sure they don't get paid too much, says Ben Rajotte, a lawyer for the Disaster Relief Clinic at Touro Law School on Long Island.
"That provides tension within the program," Rajotte says. "Then that tension is magnified by the fact that you have basic fundamental principles of administrative law that we don't think are being followed."
Rajotte says his team of law students has tried to help local Sandy victims navigate the insurance maze, but he says they kept getting stuck in the flood program's dual roles. For example, he says, FEMA repeatedly changed how much proof was required to show damage losses.
"You have essentially FEMA making up the rules as it's going, and the rules favor the insurers," he says.
Rajotte wants FEMA to cede its regulator role to a third party, so that when policy holders have problems — like questionable engineering reports — they have a place to go that isn't also charged with keeping insurance payouts low.
FEMA says it has done this. Two months ago it created a public advocate's office. Still, flood insurance companies continue to take a great deal of criticism for lowballing damage estimates.
Complaints arise when people misunderstand the limits of the National Flood Insurance Program, says Ed Pasterick, who worked for the program for 40 years before retiring in 2014.
"The policy as it stands now only covers damage caused by flooding," Pasterick says.
Right now, Pasterick says, the premiums paid by homeowners in flood plains don't even cover all of the risk created by flood alone. Taxpayers have to chip in to pay for the rest. If homeowners want a flood policy to cover other damage, Congress would have to pay for it, he says.
"You know, that's up to somebody to decide," he says. "If they decide that the program should cover everything, than you're going to expand the program significantly."