Insurance companies won't pay until the gov't ponies up?

I just saw this on the ABC news: insurance companies for the Sandy area won’t pay claims until the government sends money. Is this normal procedure in disasters? How can insurance companies withhold insurance money that a person has been paying premiums for? Seems like total bullshit to me.

I haven’t heard of any such story. Although insurance companies are less than eager to pay out in full immediately after a disaster like Sandy, the only insurance that’s actually waiting for the government is the National Flood Insurance Program, which run by FEMA. NFIP was completely out of money until the vote on Friday.

Ah, didn’t know that. This article explains it.