At the latest count, FEMA has provided nearly $1.4 billion in direct aid to individuals impacted by Hurricane Sandy. Additionally, $7.9 billion in flood insurance payouts has been appropriated to help state, local and tribal governments make the appropriate repairs that were necessary as a result of Hurricane Sandy. Furthermore, the Small Business Administration made $2.4 billion in low-interest loan assistance to homeowners and small businesses. Despite the impressive amount of aid, less than half of those who sought aid received any.
According to FEMA, the average claim check was for $57,754.00. However, unmet expectations between the amount that homeowners and the actual amount covered by insurers were a major source of aggravation.
Hurricane Sandy is the third costliest major catastrophe to occur in the United States. As such, the process to compensate victims has not been problematic.
Considering the magnitude and the severity of damage, the process to get homeowners a fair level of compensation has been hampered by a few serious issues. First, there have been allegations of nearly 1,500 who received lowball insurance payments. Second, serious claims made by homeowners that insurance adjusters altered engineering damage reports have plagued homeowners. As a result, FEMA will reopen as many as 144,000 flood insurance cases for review. There have also been allegations of widespread fraud levied by homeowners (insurance companies dispatched adjusters who sought to reduce insurance payments to victims) who claim that this was done to minimize claims.
There is a $48 billion storm recovery fund set aside for the recovery effort by the government, yet only $11 billion has been dispensed and spent. Much of the delay in allocating the relief funds was to avoid a rehash of the waste and corruption from coordination complications due to Hurricane Katrina in 2005.
Federal flood insurance program covers up to $250,000 of flood damage, but a sizable portion of homeowners may believe that their homeowner’s insurance covers the damage and therefore not renew their flood coverage policies. Typically, homeowner’s insurance does not cover flood damage.
Where Did FEMA Aid for Hurricane Sandy Go?
Nearly $2.47 billion went to public utilities.
Nearly $1.83 billion went to public buildings.
About $1.65 billion went to protective measures.
Nearly $1.24 billion went to debris removal.
About $0.45 billion went to roads and bridges.
Nearly $0.42 billion went to recreations/other.
About $0.06 billion went to state management.