Until six months ago, Steve Kanstoroom hadn't given flood insurance a second thought. But on Thursday, the retired consultant from Talbot County was sitting with the head of the federal flood insurance program in the lobby of a suburban Washington office tower, sharing insights into ways to prevent a repeat of the widespread problems with claims that followed Tropical Storm Isabel.
The National Flood Insurance Program relies on such a complex interaction
of private insurance carriers, adjusting firms and third-party administrators
that, despite decades of experience by top NFIP officials, no one in the
program fully understood all the nuances of how the system works, said Federal
Insurance Administrator Anthony S. Lowe. But somehow, Lowe said, Kanstoroom
has put together the big picture in a way that others haven't.
In the process, Kanstoroom, who is pursuing a claim for his house in
Oxford, has become something of a folk hero to Isabel victims from Maryland to
North Carolina. Working mostly behind the scenes, he has dug into the
mind-numbing details of obscure federal regulations and used them to prod the
flood insurance program into what even the most despairing of Isabel victims
are starting to believe is a real chance for reform.
"He's part insider, part Deep Throat, and he showed 'em the smoking gun,"
said Baltimore County Executive James T. Smith Jr., who sat in on some of
Kanstoroom's meetings with the NFIP last week.
"As a former judge, I sat there watching this guy and thinking, `This guy
would be the best lawyer who ever argued in front of me.' He was so
organized," Smith said. "I just sat there as their jaws dropped and dropped.
It was almost surreal."
More than six months after the storm, hundreds of Isabel victims are
dissatisfied with their insurance settlements, which many say are a fraction
of what they need to rebuild. The government has offered some help - Gov.
Robert L. Ehrlich Jr. is scheduled to sign a bill tomorrow offering
low-interest loans, for example - but a constant refrain of Isabel victims is
that they don't want a handout. They say they just want what they believe the
flood insurance program owes them.
Like many flood policyholders in Maryland, Kanstoroom and his neighbors
figured that their insurance would cover their losses from the storm. But he
says that when he and the elderly couple who live next door were offered
settlements far below the costs to rebuild, he got upset.
Those who have studied the flood insurance problems Marylanders experienced
after Isabel have found that many policyholders, along with insurance agents
and adjusters, lacked an understanding of what is covered and what is not.
Not so with Kanstoroom, a 46-year-old father of two who spent 20 years
designing fraud detection systems for banks. He read the policy. He looked up
the manuals for private adjusters and the insurance companies that sell and
service flood policies. He investigated the contracts of the NFIP's
subcontractors, bought a copy of the software program some adjusters use and
pored over the federal laws and regulations that govern the program.
In the process, he uncovered what he saw as grave flaws in the system -
subtle mechanisms that, in practice, prevented victims from getting what they
"What motivated me to keep going was, the more I looked, the more I found,
and the more concerned I became," Kanstoroom said. "And when I saw the level
of despair and hopelessness, I thought I couldn't not do it."
Many of the victims, advocates and officials who have met Kanstoroom during
the flood insurance saga haven't known quite what to make of the frenetic man
with salt-and-pepper hair who seems constantly going in four directions at
once. Many said that at first blush, he sounded like a kook.
"Crazier than hell," said Marybeth Midgett, an advocate for Isabel victims
in North Carolina who came in contact with him last month. "But every time he
mentioned something, I would go on the Internet and start looking stuff up.
Every piece of information he gave me checked out."
Kanstoroom contacted Bernice Myer, a victims' advocate whose Millers Island
home was destroyed in the storm. He met with Maryland Insurance Commissioner
Alfred W. Redmer Jr., former Commissioner Steven B. Larsen, Smith and Sen Paul
S. Sarbanes' staff. He also talked with reporters.
He made contact with the NFIP but didn't get much of a response. Until last
On Tuesday, Redmer arranged a meeting for Lowe with a dozen of the most
dissatisfied Isabel victims in Maryland. Kanstoroom wasn't invited, but he
showed up anyway, and Redmer let him in the room.
All of the other flood victims in the meeting told their stories, but when
Kanstoroom asked to speak, the moderator cut him off and said it was time for
a coffee break, Myer said.
"The citizens said, 'Oh, no. You need to sit down because, so far, he's the
closest thing we've had to an answer in six months. We're not taking a coffee
break,'" she said.
As Kanstoroom laid out some of the problems he found, Lowe seemed
interested, Myer said. The victims in the room were, too.
"It brought back hope to us," she said.
The NFIP officials invited Kanstoroom to speak with them. He brought Smith,
and the two spent 5 1/2 hours with Lowe and his top deputies the next day.
Lowe invited Kanstoroom to the summit Thursday in Falls Church, Va., and he
spoke there, too.
After that session, Lowe talked to Kanstoroom for more than an hour about
strategies for improving the program and asking for copies of the regulations
he would need to read to understand the problems Kanstoroom found.
"Steve has done an excellent job," Lowe said.
After the summit ended Friday, Lowe, looking exhausted after two days of
meetings and a hearing on Capitol Hill, plopped down in an armchair in the
office tower's lobby. Once again, there was Kanstoroom, sitting opposite him.
Lowe talked for a few minutes about the summit, then Kanstoroom reached
into a folder and pulled out a page of notes scribbled on the back of an
agenda from the summit - his 10-point plan to fix the NFIP. Lowe called back
one of his top deputies, and they sat and listened.
"Obviously, I'll be meeting with Steve again," Lowe said. "Monday morning,