Marjorie and Charles “Chuck” Gill had $165,200 of flood insurance coverage on their three-bedroom home near Bayou Manchac.

But after more than 3 feet of water swamped their house off Old Jefferson Highway in the historic 2016 flood, they found themselves taking out a $24,000 Small Business Administration loan and making many repairs themselves.

Their insurance company, Allstate, gave them about $75,000. The Gills insisted they needed more to cover the cost of fixing things like their exterior siding, the wall sheathing behind their exterior walls and their outside air conditioning unit. A second adjuster from Allstate estimated they could get another $8,200 — $40,000 less than what they argued was needed.

The Gills are among hundreds of families, plaintiffs' attorneys say, who are seeking legal help pursuing insurance claims more than a year after the catastrophic flood.

At times becoming emotional over the experiences of the past year, Chuck Gill recently sat with Marjorie Gill in their living room near the unfinished fireplace — one of the final touches needed to fully restore their home — as he recalled overcoming his natural distaste for resorting to litigation.

"I told her, I said, 'Marge, we can't fight these people. We don't know who we're fighting. We don't know if we're fighting FEMA, or we don't know if we're fighting Allstate,' and I've had Allstate for 40 years … 38, 39 years, something like that," he said. "I mean, I pumped a lot of money into that company, and for them to be like they are with us, I just think that it's wrong."

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The National Flood Insurance Program provides federally backed flood insurance to homeowners and businesses. Private insurers sell flood policies and administer claims, employing an array of adjusters, engineers and lawyers working on contract. But it is the government that sets rates and standards and that assumes the financial risk from the policies.

Suspicions of mismanagement and profiteering by those insurers have lingered for years. The federal Governmental Accountability Office and inspector general have repeatedly called on the flood insurance program to improve various aspects of its operations, including how it monitors and pays private insurers.

As far back as Hurricane Isabel in Maryland in 2003, plaintiffs in a class-action lawsuit accused the National Flood Insurance Program of training adjusters how to undercut claims. Another common complaint was that the private insurers falsely marketed policies by saying the coverage would make flooded homeowners financially "whole" again. 

Nearly a decade later, Superstorm Sandy exposed fraud by an engineering firm working for an insurer and generated allegations of systemic low-balling by engineering contractors working for insurance companies. Legal and other government reviews prompted nearly $400 million in additional payouts to policyholders.

But insurance industry groups note the allegations in Sandy led to the conviction of just one engineering company and an executive, not an insurer, and they contend a small number of policyholders have problems. Plaintiffs' attorneys with a financial incentive are peddling a “false narrative,” they argue, while insurers don't profit from low-balling claims paid with government money.

Tom Santos, a spokesman for the American Insurance Association, said the reality is that participating companies — known as "write your owns," or WYOs — follow strict standards set by the National Flood Insurance Program.

"People who are unhappy with their payment amount can ask that it be reconsidered, ask that it be appealed within the WYO, and appeal it within the (National Flood Insurance Program)," Santos said. 

Many people don't understand the limitations of their coverage, insurers and some outside observers argue. Unlike under a typical homeowners policy, their contents, including carpet, are covered at a depreciated value. Flood policies do provide homeowners with replacement cost for their primary residence — which must be a single-family home — but only if their policy value equals at least 80 percent of the home’s value or is the maximum $250,000 building coverage.

The policies don’t end up covering a lot of expenses that emerge after a flood, critics argue, such as required building code upgrades, replacement of undamaged upper cabinets that don’t match damaged lower cabinets, and contents in basements. 

Roy Wright, director of the National Flood Insurance Program, couldn’t provide a “yes” or “no” answer when asked in a recent interview whether the program was designed to make homeowners “whole.” He noted the standard flood insurance policy’s limitations, adding that question is really a judgment for each homeowner.

“It is designed to allow people to recover more fully and more quickly. That’s what it’s there for, and depending on how their coverages are laid out and the nature of their structure, only they can judge what ‘wholeness’ looks like,” Wright said.

But some homeowners say insurers and adjusters often interpret policies in a way that hurts them.

Marjorie Gill, who is a retired LSU large-animal veterinarian, struggled with Allstate over her and her husband's claim. She said she dealt with two contract adjusters, an engineer who promised more money but was never heard from again, and two internal adjusters at an Allstate facility in Alabama. The company lost data files and pictures, which complicated the process, she added.

She said still can't understand why it was so difficult to get paid what is needed to fix their home.

"I think it's too hard to get the compensation that you need, even with proof. It's too much work on our part. It's grueling. We're already stressed, and ... it's not easy to contact somebody directly," Marjorie Gill said.

Allison May, an Allstate spokeswoman, did not address the Gills’ complaints but said the company handles claims under the Federal Emergency Management Agency's regulations and policy language. Allstate’s “top priority” is to help policyholders through the claims process and get them back on their feet, May said.

Don’t ‘ask for the moon’

One summer night in July in a public library meeting room in Baton Rouge, New Orleans plaintiffs' lawyer John Houghtaling made the case to a small audience of flooded homeowners that, after what he’d seen in Superstorm Sandy, they should beware and act fast.

Houghtaling led litigation in Sandy that exposed, as one federal judge put it, “reprehensible gamesmanship” by engineering company U.S. Forensic to secretly alter an engineering report on one flood-damaged home and possibly hundreds of others.

U.S. Forensic was working for Wright Flood, whose top executive later invoked the Fifth Amendment when asked if widespread low-balling was occurring. The judge sanctioned Wright Flood $1.1 million. A subsequent federal review of all Sandy claims awarded an average of $13,216 in additional payments to 16,900 policyholders, FEMA says.    

Houghtaling told the library audience that his firm has learned of several tricks insurers and their contractors use to undercut homeowners' claims.

Those he cited that night also have been raised by several other lawyers since, such as failing to cover water damage in walls and insulation above the water line or to exterior sheathing, and requiring homeowners to provide receipts for work done to make the case for supplemental funds above their initial settlement.

“So what they’ll do is they’ll say, ‘Well the estimated cost of repair was $100,000. And you say, ‘Well I can’t fix my house for $100,000,’ and you go out. You give it to a contractor. You do what you can. You spend $100,000. You may not be happy with the job you get as a result of that and then things aren’t done. Maybe you do the rip-out and stuff yourself,” Houghtaling told the group. 

Jason Spencer, owner of Spencer’s Contracting in Baton Rouge, has handled several post-flood repair jobs and has worked with insurers.

Spencer recalled debates with insurers over repairing exterior sheathing, which are the large sheets of plywood or particle board nailed outside wall studs but behind siding or brick. The insurers wanted Spencer to cut out the damaged material from inside the house instead of paying to remove exterior brick or siding to replace the whole sheathing. Spencer said removing too much sheathing from the inside can compromise the structural integrity of the home.

Spencer said the insurers often want to pay only for materials submerged by floodwater, what's often referred to as paying "up to the water line" left in the house by departed floodwater. 

Although insurers usually will pay to replace at least 4 feet high of wallboard no matter the depth of the water because wallboard comes in 4-by-8-foot sheets, the policy translates into odd inconsistencies, Spencer and others noted. Spencer recalled one home where an insurer wanted to pay only for 2 feet of insulation even though 4 feet of wallboard was being replaced. In other cases, insurers did not want to pay for electrical outlets and lines unless he could document corrosion.

The standard National Flood Insurance Program policy covers damage that is “directly caused by the flood.”  Plaintiffs' attorneys argue that means wallboard, insulation and other things that absorb sitting floodwater but aren’t directly touched by it.

Despite his criticism, Spencer said he never got the feeling that adjusters were trying to strong-arm his clients or treat them unfairly. He said he could hear the empathy in their voices.

“You know, from one adjuster, it did come across like, ‘Hey, you know this is a broke system financially, anyway, so it’s not like you can ask for the moon.' So it was almost presented in a light like, ‘Hey, this is only catastrophic insurance,’ ” Spencer said. “It’s not something that you should expect to make you whole.”

The complaints about insurers come during a critical time in the administration of last year’s flood claims.

Homeowners and businesses face deadlines to turn in additional documentation showing what they think they are due, also known as a proof of claim. Those proofs, which typically revise what insurance adjusters have initially provided, set the upper limit for what homeowners can pursue in additional funding from their insurers.

FEMA agreed to extend that deadline to Dec. 31.

‘Weighing on you’

Tanya and Bryan Blanchard — both in their mid-40s — are living with family in Plaquemine and sitting on a $15,000 “get started” check from their insurer, Foremost. But they are being told by their attorney that their insurance adjuster’s estimate of about $90,000 shorted them close $50,000 on their four-bedroom, two-bath home in a hard-hit Denham Springs neighborhood off La. 16. 

Most of their home is elevated more than 5 feet, but it still got 18 inches of water. A ground-floor room where Bryan Blanchard used to exercise was hit with 5 feet of water. Among the items the Blanchards say they can’t get Foremost to pay for: anything above the water line, including soggy wall insulation that wicked up floodwater; the expensive workout equipment in the ground-floor room, which is being treated as a basement; and any exterior siding or sheathing.

During a recent visit to their gutted home, a window air conditioning unit was running to keep the mold down in a rear bedroom. The Blanchards noted that some of exterior sheathing is plywood and in good shape — but the particle board pieces, not so much. Bryan Blanchard rubbed a piece of that sheathing in a rear, gutted bedroom wall to make his point.

“Look. It just crumbles,” he said.

The Blanchards, who did the gutting and mold remediation themselves, said they want to get out of the house and buy a new one but can’t receive the rest of their settlement until they start work. The Blanchards don’t want to start repairs until they know how much money they have.

A particular frustration for Tanya Blanchard is that some neighbors who didn't have flood insurance but accessed government assistance are already back in their homes. Meanwhile, she said, her insurer is nitpicking the settlement, forcing them to remain out of a home with a monthly mortgage.

“It’s been over a year now, and it’s starting on weighing on you after a while,” Bryan Blanchard said.

A spokesman for Foremost declined comment because the Blanchards have sought legal counsel.

Mary Johnson and Clois Spivey live off South Harrell’s Ferry Road past O’Neal Lane. Though just outside the high-risk flood zone, the couple, both retired, had maximum building and contents coverage. Their home took on 18 inches of water.

They said they have gone round and round with insurer Wright Flood and adjuster Colonial Claims over coverage for their outside air conditioning unit, a natural gas-powered backup generator and what they see as unreasonable demands to prove the value of their destroyed possessions covered by their $100,000 contents policy.

They received $92,000 for their home and just under $13,000 for their contents with the promise they could seek more. But the partially covered air conditioning unit alone cost $13,442, and the couple has refused to sign a supplemental claim for contents because it would have given them only another $40,000. 

The couple wound up using the insurance money for their flooded car to buy new, unfinished furniture for part of the house. Clois Johnson, 71, who worked for decades building 747 jets in California, has done some repairs himself, like tile work, with the help of neighbors. 

What perhaps riles the 64-year-old Mary Johnson most is her fight over the contents. A former midlevel official for a California assessor, she said an adjuster told her she had too many clothes after she submitted pictures of 131 pairs of pants and 62 pairs of shoes destroyed in the flood. She said she was asked to provide receipts, even for the undergarments she bought from Victoria’s Secret.

“Your panties and your bras?" she asked, incredulously. "You pay the bill, but (the company wants) the receipts?”

Dolores Glass, a spokeswoman for Wright Flood, said by policy the company doesn't comment “on any active legal matters, especially where claimants are involved.” She added that the company keeps the lines of communication open to work toward a resolution. 

Small problem, or poor measurement?

Despite attorneys' claims and anecdotal accounts, the size of the problem with insurers in Louisiana remains uncertain.

Insurance industry officials, for instance, point to the National Flood Insurance Program's own data showing it has closed 99.64 percent of the 29,657 claims made over the Louisiana floods last year, paying out nearly $2.45 billion. 

"So while there will always be a policyholder here and there unhappy with their claim, the vast majority of claimants — 99.6 percent to be exact — seem to be satisfied with their claim payment and are on the road to recovery," said Loretta Worters, spokeswoman for the Insurance Information Institute.

On another front, through Sept. 13, FEMA was handling 285 administrative appeals from the Louisiana flood. Separately, the FEMA Office of the Flood Insurance Advocate, created after Superstorm Sandy as a kind of an ombudsman for the flood insurance program, has received just 36 complaints.

Wright, the head of the National Flood Insurance Program, said those statistics suggest the number of problem claims for the Louisiana floods are well below the industry standard of 2 percent to 3 percent.

“As we look at those files and get overall numbers, we’re actually hearing fewer complaints than I’ve had in some other events,” he said.

But plaintiffs' attorneys say that's not a complete picture. One red flag they raise is that FEMA considers claims closed after policyholders accept the initial offer of money, even if they later ask for more because their contractors discover damage adjusters missed.

A key early step for any flood insurance claim comes when the adjuster arrives to estimate the damage done to a home.

The standard federal flood insurance policy says it is the homeowner's duty to provide a documented statement of damage -- a proof of claim. But many wait on the adjuster, who is technically a "courtesy" provided by the insurer, to do that for them.

Homeowners also typically can't get money from an insurer, except for an accelerated initial payment, until they sign that proof of claim from the adjuster, documenting that they accept it.

At that point, FEMA considers the claim "closed." Often, homeowners sign after adjusters promise that a supplemental claim can be sought later, after their contractors document added costs, several policyholders said. 

It is during the rebuilding process that homeowners often realize the amount they received won't cover all their expenses.

Luis Campos, 69, whose house in the Sherwood Forest neighborhood of Baton Rouge got 18 inches of water last year, said his adjuster from insurer Wright Flood came across as someone trying to provide him and his wife, Mary, with what they would need to get back in their home.

The couple, who live in the upstairs area of their two-story home, received $72,658 from Wright Flood with the expectation that their contractor could file a supplemental claim for whatever the adjuster missed.

“We played by the rules that were presented to us,” Luis Campos said.

But after kicking their contractor off the job in June because of incomplete work, they found damage their adjuster had missed, including carpet for the stairway, buckled windows and water in the wall around those windows.

Luis Campos said he knows people don’t trust their insurers in general: “It’s like a national tradition,” he said.

But he said he is convinced he and his wife didn’t get enough from Wright Flood. The couple have hired Houghtaling and said they believe they may be been shorted $60,000 to $70,000.

Plaintiffs' lawyer August Matteis Jr. said many policyholders aren’t even aware they can challenge what the insurance companies decide to pay out.

"There is a huge problem with getting information to homeowners in Louisiana," he said. "Most people with flood insurance are not fully aware of their rights to contest the insurance companies’ low-ball estimates that are inadequate to rebuild their damaged homes."

Some critics, plaintiffs' attorneys and congressional investigators that looked into the Sandy allegations have suggested there are a variety of indirect incentives that motivate insurers to undercut claims. Those factors include the flood insurance program's poor fiscal health, the inability to sue insurers for bad faith and FEMA’s own audit processes that penalize insurers for overpaying but not for underpaying.

Yet a majority report from the Republican-led U.S. Senate Committee on Banking, Housing and Urban Affairs investigation of Sandy found "no persuasive evidence to support the existence either of any general incentive to underpay policyholders or of any practice of doing so" and that overpayments were actually more common than underpayments.

U.S. Sen. John Kennedy, R-Madisonville, who is co-sponsor of a wide-ranging bill with Sen. Bob Menendez, D-N.J., and others to reauthorize and modernize the National Flood Insurance Program and its flood risk assessment, said he believes low-balling has happened in Sandy and prior storms and after the 2016 flood.

The bill, which would not allow policyholders to sue for bad faith, instead proposes a series of attempted protections that would financially penalize insurers for both over- and underpaying; allow the flood insurance program to kick out problem insurers, adjusters and other contractors or consultants; allow policyholders to get attorneys' and expert fees for any appeals they file; and take the job of defending flood insurers away from private lawyers and give it to the U.S. Department of Justice. 

"Now I'm not saying that the insurance companies are just supposed to approve every claim without reviewing it. I'm not saying that," Kennedy said. "But it's clear to me that some of these companies that have some consultants who, just after people flood and go through hell, they make them go through hell a second time to get paid ... and sometimes the fees that the consultants charge and the lawyers charge are as much if not more than the claim, so it makes no financial sense, as well as being immoral."

Sherry and Brian Mack, of Port Vincent, who are locked in a fight with their insurer, say they still plan to build a new, higher house after their 3,200-square-foot home not far from the Amite River took 7 feet of water in August 2016. A month after the flood, they got a condemnation letter from the Livingston Parish government.

Despite two licensed contractors' estimates valuing the cost to repair their home at more than $200,000, they said they can’t persuade insurer The Hartford to increase a $53,900 settlement offer under their $176,000 building policy. The Macks also got $26,000 for contents.

The Macks live in an old family home that has flooded several times in the past. They had been in line for a federal hazard mitigation grant to elevate before a minor flood in March 2016, but the combination of the cost of their 25 percent match and of recovering from the March flood delayed their ability to start the elevation project until it was too late to meet the program deadline.

Three weeks before the August flood, they received a $22,000 insurance settlement for the March flood. The Macks, who are living in a FEMA mobile home on their 3-acre property with their horses, said they have had a hard time reaching anyone about their August flood claim and feel the level of detail the insurer now wants for their contractor's estimates is too much, down to the number of nails expected to be used.

“I’m like really, y’all are getting a little bit ridiculous now,” Brian Mack said. 

Thomas Hambrick, a spokesman for The Hartford, said the company does not comment on specific customer information. He said the company follows flood insurance program regulations.

The Macks have hired attorney Mike Breinin and are working on a proof of claim, and they have separately applied with the Louisiana Restore program. But they have also gotten a letter recently from FEMA that says they have to move out of their trailer in February.

Sherry Mack said an examiner with The Hartford told her several months ago that, basically, she has “gotten all the money I’m going to get.”

“I told her, ‘My name is Sherry Kelley-Mack. Please make sure she knows that name because I’m not going away,' ” she said.

Follow David J. Mitchell on Twitter, @NewsieDave.