Senators seek action on Isabel claims

They call for reviving use of outside auditors

October 15, 2004|By Andrew A. Green | Andrew A. Green,SUN STAFF

With some Tropical Storm Isabel victims receiving fresh denials of additional coverage under the federal flood insurance program, Maryland's U.S. senators sent a letter yesterday to Homeland Security Secretary Tom Ridge asking for him to revive a third-party review of unsettled claims.

Sens. Paul S. Sarbanes and Barbara A. Mikulski sent another letter to U.S. Attorney General John Ashcroft yesterday asking him to look into allegations by flood victims' advocate Steve Kanstoroom that "material misstatements of fact" by officials at the federal flood program and its subcontractors have cost policyholders thousands of dollars.

The senators told Ridge they are "deeply concerned" by acting National Flood Insurance Program head David Maurstad's decision to halt the independent review and his reluctance to meet with storm victims whose claims are in dispute.

"It has been over one year since Hurricane Isabel devastated the lives of many of our constituents," the senators wrote. "We believe that one open case or one family living in a [Federal Emergency Management Agency] trailer this winter is one family too many."

About 160 Maryland families are still living in trailers because of the storm, the senators wrote in their letter to Ashcroft.

Spokesmen for Ridge and Ashcroft said they did not immediately know whether their offices had received the letters.

FEMA spokesman Butch Kinerney said in an e-mail that the National Flood Insurance Program has done everything it promised Sarbanes and Mikulski it would do. He wrote that the agency has sent final letters to the policyholders the senators were helping and advised them of their right to sue, if they are still unsatisfied.

"It's important to remember that in April of this year, FEMA undertook the unprecedented review of Isabel-related flood insurance claims," Kinerney wrote. "There is a very small group of policyholders that, absent receiving checks equaling their full policy limits, will be unhappy regardless of any claims adjustment."

The flood insurance program paid out millions in additional settlements over the summer, but some victims complained that they still had not received a thorough, independent review of their claims. For that reason, the Maryland senators asked the program to hire an outside auditor this past summer to look at claims in dispute.

Maurstad told the senators last month that he had removed the auditors because of concern about lawsuits filed over disputed Isabel claims.

A week ago, several flood victims who had sought assistance from Mikulski's office started receiving nearly identical letters from Maurstad denying them additional payments without addressing the specific claims they made, those victims said.

"They just said, `This is the amount you're getting,' and that's it," said Tammy Schwartz, whose Bowleys Quarters home was destroyed by the flood and who is living in a trailer.

In their letter to Ashcroft, Sarbanes and Mikulski asked the attorney general to "take every appropriate action to address this matter promptly."

Kanstoroom, a Talbot County man who has worked with officials in Maryland, Virginia, North Carolina and Florida to help settle flood insurance claims, said he sat in on a training session for agents who sell flood insurance in which they were told the policy is designed to restore victims to their pre-flood condition. Similar language appears in the flood insurance program reauthorization bill President Bush signed in the summer.

But adjusters routinely told flood victims that the policy was not designed to restore them to pre-flood condition, Kanstoroom said. After the recent Florida hurricanes, Maurstad told a Fort Myers TV station the policy is designed to help victims get back on their feet, not to make them whole.

Kinerney declined to comment on the letter to Ashcroft.

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