Superstorm Sandy

AP Photo/Jason DeCrow

The Federal Emergency Management Agency (FEMA) said Monday it's boosting its oversight of the private insurance companies contracted by the National Flood Insurance Program.

FEMA manages the flood program, which allows people to buy flood insurance from the federal government. The agency hires private insurance companies to process claims and payouts in the flood program.  The insurance companies hire engineering firms to survey damage, and adjusting firms to calculate how much it will cost to repair the damage. 

AP /Mark Lennihan

The Federal Emergency Management Agency said Wednesday it will reopen as many as 15,000 insurance claims related to Superstorm Sandy. The announcement comes after two weeks of negotiations with homeowners who say fraudulent engineering reports shortchanged them out of tens of thousands of dollars.

It was happenstance that a handful of homeowners discovered the damage estimates to their homes were based on forged engineering reports. During litigation, lawyers said they uncovered thousands more questionable reports.

AP Photo/Jason DeCrow

The Federal Emergency Management Agency has tentatively settled insurance claims with 160 Superstorm Sandy victims, who allege engineering firms altered damage estimates. Meanwhile, lawyers say roughly 200 new policyholders say their reports were also changed.

FEMA manages the National Flood Insurance Program which, allows people to buy flood insurance from the federal government.

AP Photo/Frank Eltman

Negotiators for Superstorm Sandy victims in New York and New Jersey said talks with the Federal Emergency Management Agency have stalled.

Charles Lane/WSHU

After Superstorm Sandy in 2012, Kathy Hanlon's life crumbled. Her Long Beach, N.Y., home had no electricity, her family was traumatized and one of her sons was getting sick. On top of that, there was the bureaucratic maze of flood insurance.

"I cried many times because I was so angry when I got off the phone with the insurance company," Hanlon says. "It was demeaning. We had to send them things repeatedly. We had to wait for phone calls. We had to wait for people to come visit the house."

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