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Wednesday, October 30, 2013

Disaster Relief Is Slow In Coming for Victims of Superstorm Sandy

Bureaucratic red tape remains tangled as storm victims suffer and wait

Even after an entire year, people with water-damaged homes because of Superstorm Sandy are being obstructed from repairs by insurance disputes and government bureaucracies. Billions of dollars appropriated by Congress months ago has failed to reach homeowners in need of the federal aid and thousands of individuals have discovered that their flood insurance payment was not nearly enough to cover the cost of repairs.

New federal rules for property in high-risk flood zones state that homeowners must lift their house on pilings or stilts. Besides being a very expensive modification to existing homes, in some cases such an alteration is impossible. Insurance rates of $10,000 or more per year are charged to homeowners that are unable to make the modifications.

After Sandy filled Gina Maxwell’s Little Egg Harbor, New Jersey home with water she was devastated. "It's just been such a terrible burden," she says. The home is still a wreck and contractors estimate it will cost $270,000 to rebuild. The cost is nearly double what the insurance company gave her and she does not have that kind of money. "What do we do with this house? Just give them the deed back?" she asks. "My son is 11. He has a little piggy bank in his room. He said, 'Take it, mom.'"

As storm victims try to figure out if they should take on more debt, promised relief is slow in coming. $2.4 billion in disaster loans has been authorized to more than 36,000 businesses and households through the Small Business Administration; to date only about one quarter of that has been paid out. So far, FEMA has given out $1.42 billion to help storm victims make emergency repairs, replace lost possessions and pay rent as well as $2.7 billion to municipalities to reopen damaged hospitals, repair critical infrastructure and clean up debris. Nearly 132,000 policyholders in the federal flood insurance program have received $7.8 billion but for many it is not enough to rebuild. Many victims did not have flood insurance.


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