Low payouts by flood insurance leave many Sandy victims in a lurch NEW YORK, Dec. 7 (UPI) -- More than half of those who filed federal flood insurance claims after Hurricane Sandy hit the mid-Atlantic were paid enough to cover losses, records showed. Benefits from federally subsidized flood insurance often did not pay victims enough to have their storm-damaged homes replaced, leaving homeowners stuck with vacant lots, The New York Times reported Saturday. "I think flood insurance underpayments is the single biggest reason for why the rebuilding hasn't really taken off," said Benjamin Rajotte, director of the Disaster Relief Clinic at the Touro Law Center on Long Island. Frequently, people are coming in saying they received half or less of what it would take to rebuild their house. The Times said records from the Federal Emergency Management Agency indicated that while the flood insurance program alone paid out nearly $8 billion, fewer than half of the applicants for federal aid received anything beyond $5,000 in emergency cash for temporary shelter. The situation has left about 30,000 residents of New York and New Jersey displaced more than a year after Sandy hit, the Times said. An official with the FEMA-administered flood insurance program told the newspaper a major factor was that insurance pays the current value of a loss rather than the full replacement value. That can often leave middle-class policy holders without the financial means to rebuild.