In the years following 2012's Hurricane Sandy, news reports have detailed serious shortcomings in the nation's disaster recovery programs—particularly in the National Flood Insurance Program (NFIP) administered by the Federal Emergency Management Agency (FEMA). The press has also reported on FEMA's promises to fix the NFIP and make it more effective. But is the agency delivering? Not according to National Public Radio (NPR) and the Public Broadcasting System (PBS). The two public news organizations teamed up in May for an in-depth report on FEMA's Sandy response, and the news wasn't good.

In Part 1 of a two-part "Business of Disaster" series, "Insurance Firms Profited $400 Million After Sandy," NPR describes how insurance companies who participate in the NFIP earn millions of dollars administering premiums and claims, without putting any of their own money at risk.

"The nation's largest insurance firms declined to disclose their profit margins on the flood program," NPR reported. "However, every year the insurance companies report what it actually costs them to do their flood work to the National Association of Insurance Commissioners, an industry association of government regulators. And every year, FEMA reports what it pays insurers who participate in the flood program. With both numbers, you can do some math. Government auditors used a similar method in 2009. Based on the latest figures, that analysis shows the insurance companies together made anywhere from $240 million to $406 million a year just on their flood work since 2011—without having to pay any claims."

In theory, the insurance companies are just administering claims and have no incentive to hold back on fair payment. But adjuster Jeff Coolidge, who reviewed claims for more than one insurance company after Sandy, told NPR that the companies pressured him to lower payouts and to pass the pressure on to adjusters in the field.

In the second part of the NPR story, "Local Recovery Programs Struggle To Help Homeowners," NPR toured parts of Staten Island, N.Y., with community leader Tommy Consulo. "Block after block, dozens of homes look like they did three years ago—boarded up and abandoned," reported NPR. "Other homes have been knocked down and their lots are empty. And still others have been elevated to avoid future flooding. 'This is New York,' Consulo says, looking out the window. 'If we can't handle a situation like this any better than the way we handled this one, the rest of the country's in trouble.'''

The tour took the NPR crew through streets where adjacent houses sit at radically different heights—some elevated post-Sandy, some not. "This is the product of multiple city, state and federal programs, which each encourage residents to do different things: renovate, elevate their homes or sell to the state so the house can be leveled," NPR reported. Often, the results are irrational. In one case, the "New York Rising" recovery program spent $600,000 to elevate an $80,000 house.