Raymond Mendoza (DAP Intern)
Over a year after Hurricane Sandy destroyed over 600,000 housing units in New Jersey and New York many families are still living with friends, family or in other temporary housing. One of the major impediments to rebuilding houses has to do with insufficient funds from FEMA’s flood insurance. Reports are coming out that people are receiving up to tens or even hundreds of thousands of dollars less from the federal flood insurance program than they are entitled to.
According to the ABC News, Kathy Gullo had her house insured for $300,000 and had several expert reports articulating the need to demolish her house and start over, but as of now she has only received $138,000. It is a national embarrassment that eight years after Hurricane Katrina we still do not have a functioning system for allocating the funding that disaster victims are entitled to.
According to the Associated Press, one of the central reasons for that peoples claims are being undervalued is that insurance adjustors are inexperienced, and are overly reliant on flawed computer models. In one case John Lambert and Lee Ann Newland had to pay $11,000 dollars out of pocket for sales tax on building supplies because an insurance adjustor forgot to include taxes in his cost model.
Many people see disasters as a golden opportunity to make a personal profit, and one way they can do that is to get hired as insurance adjustors to help with the massive amount of insurance claims that need to be processed.
The Associated Press quoted Jeff Moore, vice president of Write Flood, “The software that they use, it’s very easy. I could take you in a day and teach you to write an estimate,” In some cases that may be exactly what happened. Moore also conceded that a third of their customers were still seeking some kind of larger rebuilding package, suggesting that an exceptionally large number of claims were undervalued.
FEMA has given Sandy victims until April 2014 to submit proof of loss documents to their insurers, but many victims do not have the time or expertise to cut through the red tape. And even the ones who do may have to choose between eating into their savings and stressing relations with the friends and family they are currently living with
As is often the case in disasters, one of the biggest problems is the collection and sharing of quality data about the situation to all parties involved.
According to ProPublica FEMA still uses flood maps from 1981 to assess the risk of some communities. FEMA does not keep track of how many of its claims are disputed, nor do they release how many people are satisfied with their claims.
This is yet another example of how open data could easily improve disaster response and recovery, and help those impacted by natural disasters.