Hurricane Sandy's powerful storm surge was strong enough to damage foundations along the shore from New Jersey to Long Island. Conventional homeowners' insurance doesn't cover that situation. But now, even some homeowners who carried flood insurance are learning that their coverage won't pay for damage to their foundations.

Manasquan, N.J., homeowner Dina Sass was shocked when her claim for foundation damage was denied. "This is a section of the foundation where it broke apart and cracked all the way down through the footings and shifted," Sass said in a New York TV station PIX-11 report ("DENIED! Outrage after feds reject Sandy flood claims," by Erica Pitzi). But the flood insurance program told her that the damage was directly caused by earth movement rather than by water — and so it's excluded. In NFIP's words, "we do not insure loss of property caused directly by earth movement even if the movement is caused by flood."

After learning of the situation from the PIX-11 report, New York Senator Kirsten Gillibrand went to bat for her constituents, the station reports ("Sen. Gillibrand pushes FEMA to pay Sandy victims after PIX exposes loophole," by Erica Pitzi). In a letter to FEMA administrator Craig Fugate, Gillibrand wrote, "It is deeply troubling that damages caused by a storm of this magnitude are excluded from flood insurance policies. We must ensure that no bureaucratic fine print stands in the way of getting Sandy-impacted homeowners fully back on their feet. Our New York homeowners who suffered damages from the storm deserve the needed resources to repair and rebuild their homes."

Wrote Gillibrand: "It is unacceptable for the Federal Government to use such loopholes to deny responsible homeowners the benefits that they paid for through their insurance premiums. To deny these claims pulls the rug out from underneath homeowners who are relying on their flood insurance policies to rebuild their homes … I request that you immediately review the regulatory requirements for FEMA's standard flood insurance policy and reconsider the denials that have been issued to homeowners based on the 'earth movement' exclusion."