Katrina victims caught in insurance nightmare

Silvia I. Cosenza, who lived in Gretna, La., until Hurricane Katrina roared through, says she's been caught in an insurance nightmare: Her flood claim denied because an insurance adjuster ruled that her neighborhood was not flooded. ...That came as a surprise to Melmary Matheny, who lives across the street and has already received partial payment on her flood claim and has been told to expect another check soon.

What's the difference? Beyond the fact that different insurance companies handled the claims, neither knows.

"For sure, she flooded as much as we did," Matheny said. "Our whole entire neighborhood flooded." ...As the insurance industry grapples with its largest-ever loss and a record number of individual claims -- 1.6 million from Katrina, another 1 million from hurricanes Rita and Wilma -- policyholders are learning that the opportunity to get their lives back in order often depends on which company is processing the claim. In many cases, homeowners living in areas that were equally flooded have had drastically different experiences.

Particularly puzzling to some homeowners is that all flood claims are ultimately paid by the federal government's National Flood Insurance Program, which is operated by the Federal Emergency Management Agency.