Three years after Hurricane Sandy devastated the New York City metro area, investigative reports from NPR and Frontline returned to follow up on the recovery efforts by FEMA and residents who filed storm damage insurance claims.

What they found were heartbreaking stories of victims who, even years later, still have no home to return to and of the absolutely vile and criminal tactics insurance companies applied when adjusting many home and business owners claims, all while pocketing MILLIONS of tax-payer dollars.

Some stories of note included:

Victims of Underpaid Storm Damage Claims

Doug Quinn, a resident of Tom’s River, NJ, lost his entire house due to flood waters from the storm. Quinn, like most responsible homeowners, purchased flood insurance. At the time of the documentary, Quinn was paying the rent of his new home, the mortgage for his old home, and “insultingly” the flood insurance premium for that property as well. Quinn, at the time of the storm, had a $250,000 flood insurance policy and only received $90,000 from his insurance carrier, which is nowhere near what he needed to build his home.

Convinced that he had been severely underpaid, Quinn hired his own experts who stated that it would cost $252,000 to rebuild his home. He took his appeal to FEMA and FEMA denied his appeal. It was at that point that Quinn hired an attorney.

“A systemic way of low-balling”

David Charles, a Flood Insurance adjuster who now represents homeowners, describes his time as an adjuster for a private insurance company and how Hurricane Katrina changed the attitude of those profiting in the insurance industry who felt they had paid out “too much” for damage claims. He illustrates how his superiors mounted pressure on many adjusters to pay out less for claims saying “..things that (he) used to pay for were being rejected. Every single change that they made reduced the cost. There was never anybody telling you to increase it.” When asked why he thought the insurance companies were doing this he simply responded: “to save money.” In another interview with a former insurance adjuster manager, he described his own company’s shady adjusting tactics as “a systematic way of low-balling these insureds to say 80% of these people will never come back and ask for more money.” When asked if the insurance company he worked for told him to pay out homeowners less, he said, “Yes.”

Millions Of Tax Dollars Paying Private Insurance Companies

The National Flood Insurance Program, which, created in 1968 by the U.S. Government to help homeowner’s purchase flood insurance at a reasonable rate, paid insurance companies a fee to sell flood policies and settle flood claims. The premiums of those flood policies would be used to cover losses unless in the event that the losses were too expensive for the carrier to pay out. In that instance, tax-payers would make up the difference to help pay for those flood claims.

These details are laid out in what is called the “arrangement,” the contract between FEMA and individual insurance companies that stipulates that every year, the companies will take 1/3 of the premiums they collect from these flood insurance policies as fees for running the program while the rest goes into settling/adjusting claims. Those 1/3 fees amount to close to $1 billion a year, in some instances even more. From Sandy alone, the total profits insurance companies received from the federal government was over $400 million. Between 2011 to 2014, insurance companies EACH pocketed close to $326 million in taxpayer money on average.

Watch the full episode here: