BRICK – Sen. Robert Menendez had a message Monday for an audience of Sandy survivors skeptical about reopening their flood insurance claims: the process is designed to be both efficient and fair.
“I believe this is an opportunity to get it right this time, and to put money in people’s pockets who deserve it,” said Menendez, D-N.J. He was speaking at a forum sponsored by Legal Services of New Jersey and Volunteer Lawyers for Justice, two groups that offer free legal help to storm victims who are considering whether to participate in the flood insurance review process.
“You deserve an insurance system that works for you. You deserve better,” Menendez told an audience of Sandy survivors and nonprofit employees.
In March, the Federal Emergency Management Agency announced that 142,000 Sandy victims would get a second chance at making a flood insurance claim if they felt they had been cheated by their flood insurance provider. About 73,000 of those victims live in New Jersey.
The review was ordered by FEMA after evidence emerged of a potentially widespread scheme to fundamentally change the engineering reports that insurance companies rely on to determine if a structural damage claim is paid out.
Reports that blamed the post-Sandy damage on earth movement or house settling were often used to deny coverage.
Menendez said homeowners will only have to spend about 15 minutes on the phone to start the process of reopening their claim. Each homeowner will have an assigned caseworker who will be their point of contact throughout the claim review process.
As of June 10, 5,222 policy holders have applied to reopen flood claims, he said. Of that number, 3,441 — or about 66 percent — were found eligible for a review. Ninety reviews have been completed, he said.
While some Sandy victims say they plan to hire lawyers to assist them with the flood insurance claim review, members of the nonprofit community have urged them to first seek free legal advice.
“To think that you would give up 30 percent of the new money coming into your pockets is heartbreaking to us,” said Sue Marticek, executive director of the Ocean County Long-Term Recovery Group, referring to the fee lawyers usually deduct from any proceeds of a flood insurance review.
On Monday, Menendez attempted to address two of the major issues Sandy survivors have said could prevent them from reopening their claims.
Some fear that if they get more flood insurance money, they may have to pay back funds they’ve already received under the state’s Rehabilitation, Reconstruction, Elevation, Mitigation (RREM) program or any Small Business Administration loans.
Menendez said FEMA caseworkers who are assigned to each reopened flood claim will tell property owners up front whether or not they will have to repay money if they receive a bigger insurance settlement. If a property owner has an outstanding SBA loan, any additional flood insurance proceeds will go toward paying it off.
Other Sandy victims are concerned that receiving more insurance money could lead to their home being labeled “substantially damaged,” which would force them to elevate the structure to comply with federal flood guidelines.
FEMA considers a home substantially damaged if the total cost of repairs exceeds 50 percent of the house’s pre-Sandy market value.
Menendez said that FEMA officials have assured him that properties will not be moved into the substantially damaged category if homeowners receive more flood insurance proceeds.
Some residents remain unsure about what to do.
Cathy Gallagher, who lives in the Silverton section of Toms River, said she does not know if she will reopen her flood insurance claim.
She said she is concerned that if she receives more money from flood insurance, she may have to return some of the funds she’s already received to help repair her home, which was flooded with 21/2 feet of water.
“I don’t know what I’m going to do yet,” Gallagher said.
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As of June 10, 5,222 policy holders have applied to reopen their flood insurance claims. Of that number, 3,441 were deemed eligible for a review. FEMA has completed 90 reviews.