"We were suppose to retire in this house," said Danuta Lobeck.
But now the house Lobeck thought she and her husband would spend the rest of their lives in only exists in pictures.
The only thing left behind by hurricane Ike is a beach front concrete slab.
"I was under the impression that my house was totally insured," Lobeck said.
And why shouldn't she since Lobeck had been paying for a flood policy with Fidelity National Insurance for two years.
According to court documents shortly after Fidelity sent Lobeck two checks totaling almost 300 thousand dollars, the insurance company told her not to cash them because her property was not eligible through the National Flood Insurance Program.
"The evidence shows that they had actual knowledge over a year ago before the storm that her property was ineligible through the National Flood Insurance Program," said Lobeck's attorney James Amaro.
It was only after she filed a claim her attorney says, that Fidelity told Lobeck her home was built in a Coastal Barriers Resources Area making it ineligible for federal flood insurance.
"Well honestly I felt I was going to die," Lobeck said. "My heart stopped."
Fidelity refunded the money Lobeck had paid them for coverage.
"That's just adding insult to injury," Amaro said. "They gave her a bogus policy."
Now the retired couple is making mortgage payments on a house that no longer exists.
The Lobecks filed suit against Fidelity accusing the insurance company of false, misleading and deceptive conduct.
"We didn't know that FEMA was reimbursing legal fees when the litigation began," Amaro said.
But it became clear federal tax dollars were being spent to defend Fidelity's alleged wrongful conduct through the insurance company's defense.
In court documents Fidelity claims it has immunity for any alleged wrongful conduct because of it's relationship with the federally funded National Flood Insurance Program.
So in essence suing Fidelity, the insurance company claims is the same as suing the federal government putting tax dollars at risk.
"As a taxpayer myself I'm shocked by it," Amaro said.
"I just never in my wildest imagination thought that FEMA would be paying the most powerful lawyers for me to lose and I'm trying to understand why," Lobeck said.
"Quite frankly I think it's wrong that taxpayers should have to pay for the screw-ups, the negligence of a private insurance company," said attorney James Blackwell.
Blackwell filed suit against Fidelity on behalf of Sharon and and Robert Sippel.
"They thought they had a house that was insurable," Blackwell said. "It wasn't."
Like the Lobecks, the Sippels paid insurance premiums for years to Fidelity.
But after they submitted an 859 dollar claim for damages caused by Ike they too were told their policy was no good, that their Surfside home was built in a Coastal Barrier Resources Area making it ineligible for federally funded flood insurance.
"The insurance company knew that beforehand and still continued to issue the policy and collect premiums for years," Blackwell said.
Fidelity gave the couple their money back.
That's little consolation since now their beachfront home has an appraised value of 100 dollars.
"It was devastating for them and devastating to their nest egg quite frankly," Blackwell said.
In court documents asking that the Sippels case be dismissed Fidelity stresses the importance of the judge's ruling since "there are more lawsuits soon to be filed against NFIP policies than at any other time in the program's 45 year history."
But the insurance company didn't get any sympathy from the judge who says in court documents:
"Here Fidelity in violation of FEMA regulations negligently issued an insurance policy it should have never issued and collected substantial premium payments from the plaintiff's for years".....
"Fidelity takes cover behind FEMA's payment of it's legal defenses as proof that that federal funds are at risk and preemption therefore applies"
The judge goes on to say "It hardly seems just or decent to condone the joke-is-on-you result Fidelity asks the court to impose in it's motion."
"Essentially what the insurance company is arguing is the way the law is it doesn't matter what we do we can not be held accountable and I think that's the reason the Judge in this case said no that's not going to fly," Blackwell said.
An appeals court or possibly even the Supreme Court will ultimately decide if your federal tax dollars will continue to be spent to defend insurance companies accused of wrongdoing.
We contacted the Louisiana law firm representing Fidelity, they declined our reques for a response.