DLC - storm surgeBy now the news is out that FEMA will reopen more than 140,000 claims filed by Hurricane Sandy survivors in light of wide-spread fraud in the National Flood Insurance Program.  Thousands of people whose homes were destroyed were cheated out of settlements after insurance companies or their engineering contractors falsified damage assessment reports. How bad is it?

  • 92% of claims submitted on behalf of thousands of low-income clients represented by one legal assistance group in NY were denied.
  • A US magistrate judge cited “reprehensible gamesmanship” by engineering firms that issued baseless reports against disaster victims at the behest of insurance companies.
  • FEMA regulations encourage this type of gamesmanship by penalizing insurance companies more severely for over-paying than they do for under-paying disaster victims.

In the coming weeks, FEMA will meet with stakeholders to discuss, among other things, the process that will govern how claims are submitted, reviewed, and appealed.  It also issued a statement last week saying that it will focus on “improving the customer experience through the entire claims process.”

This is critical.  No matter how fair and objective the claims process is, it means nothing if it can’t be understood by every-day people.  For example, following Hurricane Katrina, this is how the Department of Housing and Urban Development (which administers FEMA housing programs), through their website, informed people of their eligibility for certain disaster relief benefits:

  • The only families eligible to receive the October 2009 TRP are those that have been issued an HCV on or after July 31, 2009 and have returned the FRTA to the PHA by September 30, 2009.  Families that were issued HCV vouchers before July 32, 2009 will not be eligible to receive the October 2009 TRP.
  • PHAs [are] required to complete the HAP registries with new information about the HCV conversion process.
  • The site also anticipated that someone would pose this question: If a family is in the HCV conversion process at a separate PHA from where the family receives TRP, is the PHA assisting with TRP required to contact the PHA assisting with the HCV conversion process in order to determine if the family is eligible for the September and/or October 2009 TRP?

There are lessons to be learned here.  If FEMA and other agencies responsible for disaster relief are serious about “improving the customer experience throughout the claims process,” they need to start communicating in a way that is understandable by the very people they serve.

-Kathleen Bergin (photo credit: Reuters/Mike Segar)