SECAUCUS, N.J. – United States Senators Robert Menendez and Cory Booker today announced a commitment they received from the Federal Emergency Management Administration (FEMA) to take four major actions to help homeowners still struggling to rebuild their homes by increasing transparency, fairness and credibility within the National Flood Insurance Program (NFIP) claims process.

“There needs to be transparency, so that insurance companies can’t get away with sticking it to homeowners,” Sen. Menendez said. “While I certainly understand the need to protect taxpayer dollars from waste, fraud and abuse, I equally want to protect homeowners from getting swindled out of money they deserve. Taken together these four reforms will inject fairness and level the playing field for homeowners who have been forced to fight an uphill battle.”

“I am pleased to see that on the heels of our meeting with FEMA Administrator Fugate, there is progress for those who are still enduring hardship in their recovery from Sandy,” said Sen. Booker. “The measures announced today will improve fairness and transparency, and are in response to the demands of New Jerseyans across our state, expressed firmly by me and Senator Menendez to FEMA, that the federal government improve processes to meet the needs of the residents and communities still recovering more than two years after the storm. This is much-needed progress, but I’m going to continue to fight and do everything I can to make Sandy recovery faster and rebuilding as strong as it can be.”

The announcement comes just two days after the Senators met with FEMA Administrator Craig Fugate to press again for reforms in the NFIP claims process and three months after Menendez first brought forth evidence of potentially widespread problems with the program. The Senators were joined by Congressmen Bill Pascrell, Jr. (NJ-09) and Frank Pallone (NJ-06) for the announcement.

“Thanks to the changes that are being announced today, we’re going to make sure that everyone whose home was damaged by Sandy isn’t going to get short changed by their insurance company,” said Rep. Pascrell. “It’s simply unconscionable that there are people out there who would take advantage of individuals whose homes were destroyed and lives turned upside down. I’m grateful that FEMA will be cracking down on these unscrupulous practices, reopening the appeals process, and establishing a strong Flood Insurance Advocate to fight on behalf of policy holders.”

“I am pleased that FEMA is announcing some commonsense reforms today, but we must make sure that they, and the insurance companies, are held accountable for helping those that lost so much during Sandy,” said Rep. Pallone. “I have repeatedly pressed FEMA to set up an ‘NFIP Consumer Bill of Rights’, so it is my hope that this ‘Flood Insurance Advocate’ will work hard to help homeowners understand the flood insurance process more clearly, especially those that feel as though they’ve been shortchanged. I will continue fighting with my colleagues to ensure that New Jersey families have the resources that they are rightly owed.”

The Senators outlined the main problems with the NFIP claims process and four major actions FEMA has committed to take:

1) Unbalanced Penalty Structure

Problem: Unbalanced penalty structure that penalizes Write Your Own (WYO) insurance companies for making overpayments disproportionately more than underpayments, leading to systemic underpayments.

FEMA’s Action: Administrator Fugate has committed to take administrative action to level the penalties levied against WYOs for underpayments and overpayments. He has asked Sen. Menendez to convene a task force composed of Congress, FEMA and WYOs to find the right balance while ensuring over-and-underpayments are penalized equally. The first meeting of this Task Force will convene within weeks.

2) Secret Altering of Engineering Reports

Problem: WYOs “shopping” for engineering reports in order to reduce the amount of damage reimbursable by flood insurance and refusing to comply with the New York Federal Court order to provide policyholders with contradicting damage assessments.

FEMA’s Actions: Today, Administrator Fugate sent a letter to all WYOs operating in New Jersey and participating in the NFIP, ordering them to comply with the N.Y. Magistrate Court order and provide policyholders with all engineering report iterations, including but not limited to revisions.

3) Appeals Deadline Hypocrisy

Problem: Hypocrisy by FEMA to dismiss 270 claims because the policyholder missed a deadline, yet FEMA failed to comply with its own deadlines to respond to appeals.

FEMA’s Actions: Administrator Fugate has committed to reopen and consider the appeal of 270 policyholders who suffered damage from Sandy and had their appeal dismissed because they missed a FEMA deadline.

4) Robust Flood Insurance Advocate

Problem: The need for a comprehensive, flood insurance advocate that will assist policyholders with the claims process, not limited to maps.

FEMA’s Actions: Administrator Fugate once again renewed his commitment to ensure that the flood insurance advocate authorized by the Homeowners Flood Insurance Affordability Act (HFIAA) would be robust and comprehensive, helping policyholders navigate through the claims and appeals process in addition to map revisions.

Last month, Menendez and Booker called for Administrator Fugate to address potential widespread manipulation of flood insurance claims in order to lowball Sandy victims after a federal judge in New York found that insurance providers have engaged in a pervasive practice of tasking firms to issue “baseless report[s]” in order to reduce the amount of money provided to policyholders. In the ruling, the judge found a WYO engaged in “reprehensible gamesmanship” against disaster victims and “that these unprincipled practices may be widespread.”