Rep. Pallone introduces bill to cap flood insurance company profits
Rep. Frank Pallone is pitching a bill to make sure New Jersey residents are not being overcharged on flood insurance bills.
Rep. Pallone wants to put a 10 percent cap on profits that insurers can make.
Since Superstorm Sandy, Rep. Pallone says there have been several cases of homeowners being overcharged and not enough money paid out to homeowners.
Investigations have shown that insurers were not only at times failing to pay out the full policy, but also taking profits of 30 to 40 percent.
Rep. Pallone says this bill would ensure that FEMA would watch insurance companies closely and keep their profits at 10 percent.
He says the cap should not be an issue for insurers because they are bailed out by the federal government.
"Keep in mind, anything they pay out beyond the premiums, the federal government reimburses. So it's not like a free market where you're taking any risk. They're taking no risk," says Rep. Pallone.
People in areas that were severely affected by Superstorm Sandy say they want a federal investigation of the organization. Many Sandy survivors believe what FEMA has allowed to happen is criminal.
It has been uncovered that in many cases of Sandy victims, engineers filed false reports to keep down insurance payouts.
Those cases had to be reconsidered by the agency. Not all of those reviews are complete, leaving some victims still waiting to find out if they'll get help.
FEMA says 99 percent of the claims are complete and $111 million in payouts has yet to be doled out.
Rep. Pallone says it's the responsibility of FEMA to make certain that flood victims are treated fairly and get a fair price on insurance.