Schumer: It's Time To Retire FEMA's 'WYO' Model From The 80's; Senator Urges FEMA To Do Away With 'Write Your Own' Insurance Companies; As Many As 80 Private Insurance Companies Are Short-Changing New York Sandy Victims, Churning Proft & Unfairly Reducing Payments To Homeowners

Press Release

For the first time ever, U.S. Senator Charles E. Schumer today urged the Federal Emergency Management Agency (FEMA) to scrap the decades-old Write-Your-Own (WYO) insurance model from the National Flood Insurance Program (NFIP) and move forward to overhaul the process entirely so that flood insurance policyholders in New York and across the country are benefited in the future. The WYO model has been in place since 1983 and allows participating insurance companies to write and service policies in their own names. There are currently over 80 different companies that sell policies. While the WYOs are subject to NFIP's rules and regulations, Schumer explained that often times the companies are servicing flood insurance claims with the same profit-driven mentality as they would have for their other lines of business, and as a result unfairly reducing payments to homeowners. Specifically, Schumer pointed to the months-long investigation aired by "60 Minutes' which brought to light evidence that private engineering companies altered engineering reports so as to not fully reflect the true impact and damage caused by Superstorm Sandy to New York homes, leading to the unjust denial or underpayment of flood insurance claims. These engineering firms were contracted by WYO flood insurance companies. Schumer today said that the widespread fraud regarding legitimate flood insurance claims handled by WYO insurance companies following Superstorm Sandy highlights major flaws with the WYO program. In his letter to FEMA, Schumer today called to eliminate the WYO flood insurance model entirely. Schumer said that FEMA does not need to wait for Congressional action in order to make these changes.

Schumer said," Even with a system like NFIP flood insurance --- paid for you by the taxpayer --- the bottom line is that the standard M.O. of 'write your owns' is still insurance company 101: deny-deny-deny and lowball the policy holder, rather than a victim-centered system focused on promptly paying devastated disaster victims so they can get back in their homes and resume normal lives. The only way to change this unacceptable culture is to scrap it."

"Being that the WYO insurance model is so complicated and made up of over 80 different providers, it's no surprise that we've seen so many problems. In light of the most recent issues following Superstorm Sandy, it's time for FEMA to retire the Write-Your-Own insurance companies' model entirely and move forward with a complete overhaul of the system. These WYO insurance companies have been receiving payments from the federal government while simultaneously reducing much-needed payments to homeowners for far too long, and this decades-old system from the 80's has got to go. We need something that finally does what the National Flood Insurance Program is supposed to do: fairly pay victims in a timely manner for the damage they suffered," Schumer continued.

Source