Insurance companies that write policies for flood insurance will have to get approval from the Federal Emergency Management Agency before hiring engineering firms or other experts for any claim-related work, FEMA announced Monday.

The change will provide additional oversight of private companies that write flood policies, a FEMA spokesman said. It comes in the wake of reports that potentially thousands of Sandy victims may have received paltry insurance payouts because of fraudulently altered engineering reports or bad practices by engineers or insurance companies.

In the past, insurance companies could seek reimbursement of up to $2,500 from FEMA for expenses related to flood claims without seeking prior approval from the agency. Under the new rule, all expenses, including the hiring of experts like engineering firms, must be reviewed and approved by FEMA, to ensure that insurance companies are spending taxpayer funds properly, the agency spokesman said.

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