Isabel victims skeptical of reviews

Reassessing flood claims proves complex, lengthy

`A massive undertaking'

April 26, 2004|By Andrew A. Green | Andrew A. Green,SUN STAFF

After the National Flood Insurance Program announced it would reopen all 24,000 claims from Tropical Storm Isabel, Buddy Staigerwald was quick to sign up.

He got a letter confirming what he had suspected all along - that more damages should have been covered on his original claim. But the letter didn't say what else in his Millers Island house was covered or how much more money he would get. And it said the claim had been sent back to the adjusting firm that the government says shortchanged him in the first place.

"It just leads you to have a lot of skepticism in your mind when you see it's going back to the original adjuster," said Staigerwald, a Baltimore Gas and Electric technician and volunteer firefighter whose house was twisted from its foundation and gutted by the flood. "If he didn't do it right the first time, what makes them so confident he could do it right the second time?"

The NFIP has begun reviews of hundreds of claims, and flood victims from Maryland to North Carolina have said they are heartened by the commitment of NFIP head Anthony S. Lowe to make sure policyholders get everything they deserve. But seven months after the storm, many say they are worried about whether Lowe will be able to overcome the size and complexity of the task.

Baltimore County Executive James T. Smith Jr. met last week with top NFIP officials and flood victims advocate Steve Kanstoroom. The session left Smith increasingly confident that Lowe wants to do the right thing, but with "real reservations" that the adjusters and subcontractors handling the reviews will repeat the mistakes that plagued flood victims last fall.

Smith said that at the meeting he urged the NFIP officials to retain an outside auditor.

"I think they are not going to be able to turn the ship around unless they get outside help," he said.

Readjusting all of the claims from Isabel has turned out to be easier said than done for the NFIP. Lowe announced the review at a U.S. Senate hearing a month ago. It took more than a week for him to get approvals for a news release explaining the process for resubmitting claims, and a promised letter informing Isabel flood victims of the review was only mailed last week.

"This is a massive undertaking," said Bill Lokey, the NFIP official who is coordinating outreach for the claims reviews.

The NFIP has relatively few employees and does most of its work through a system of subcontractors. In offering to review the 24,000 claims from Isabel, the agency has relied chiefly on its main subcontractor, Computer Sciences Corp., a California-based information technology firm.

CSC and independent adjusters and examiners the company has hired for the project are handling the initial paperwork and reviews, Lokey said. In complicated cases or ones in which the policyholder is dissatisfied with CSC's decision, officials at the NFIP will review the claims again, Lokey said.

Complex process

As of Thursday night, 736 flood victims had requested that their claims be re-evaluated, and 22 of them have been resolved to the policyholders' satisfaction, Lokey said. No final payments have been issued because top NFIP officials want to review the first batch of claims to make sure the process is working, Lokey said.

The hurdles the NFIP encountered in sending notices of the review process to the people who filed Isabel claims illustrate the difficulties the agency faces in the review.

It took about three weeks to get the necessary approvals of the notice's text from government officials and agencies. Once that was done, the NFIP went to the private insurance companies that sell and administer flood policies to ask for the addresses of claimants. But the insurance companies worried that disclosing the addresses would violate privacy rules, Lokey said.

Once that was cleared up, Lokey said, the agency had to hire enough temporary workers to stuff and stamp 24,000 envelopes. The first batch of notices went to the post office Thursday.

`We're not happy'

Meanwhile, flood victims wait.

Catherine and Michael Rhea, whose house on the Bird River in Baltimore County was destroyed in the flood, filed one of 80 complaints that Maryland Insurance Commissioner Alfred W. Redmer Jr. forwarded to Lowe last month. They were one of a dozen families Redmer invited to a meeting with Lowe in Annapolis.

When they didn't hear anything, Catherine Rhea downloaded a claim review form from the NFIP Web site. She filled it out and faxed it. Still nothing.

"We're not happy at all," Catherine Rhea said.

Problems farther south

In North Carolina, the attitude is "wait and see," said Marybeth Midgett, a flood victims advocate from Hatteras.

One of the major issues there concerns a new construction technique in which houses are built on mounds of fill dirt that elevate them above the base flood level. Pilings typically run through the first floor, which are commonly used for extra bedrooms or game rooms in seasonal rental houses on the Outer Banks.

That kind of construction, which has grown popular in the past five years, is not specifically mentioned in the standard flood policy, and after Isabel, adjusters routinely denied coverage of the first floor of houses built that way, said Raymond Sturza, planning director for Dare County, N.C.

Midgett said she was encouraged that Lowe issued a memo last month saying the first floor in that kind of construction would be covered, but so far, that hasn't led to any results.

"I'm not going to call it resolved until people get checks," Midgett said.

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