Double whammy: Sandy and then an insurance scandal

Relief finally might be on the horizon for some Sandy victims denied federal insurance payouts because of documents that allegedly were forged. It's about time.

The Federal Emergency Management Agency, which runs the National Flood Insurance Program, says it is deeply troubled by allegations that engineering firms doctored reports to underpay homeowner insurance claims. So FEMA has decided to broker a blueprint for reaching settlements with hundreds of frustrated homeowners and to reform its insurance program. Both steps are welcome and overdue.

The controversy stemmed from lawsuits filed by homeowners and mushroomed when a federal judge found a report on a Long Beach house was c
hanged to blame damage on structural defects in the house, not flooding. The federal government hires private companies to handle claims against the insurance it underwrites. The judge also warned that the Long Beach case might be only one of many. Now some 1,500 lawsuits disputing flood insurance claims, many from Long Islanders, are pending. And the state attorney general's office is continuing its criminal probe, recently raiding the offices of a Uniondale firm accused of rewriting engineering reports.

FEMA should have acted when first warned early last year, instead of waiting until the judge's findings 10 months later. Now, seeking to restore public faith, FEMA has removed incentives for engineering companies to lowball settlements by penalizing them for underpayments as well as overpayments.

But the best balm for battered homeowners would be for FEMA to conclude settlement talks as quickly as possible and get the money to those who are owed it