The Federal Emergency Management Administration (FEMA) has recently come under fire from U.S. Senators from New Jersey and New York because of an alleged systematic pattern of manipulation of Hurricane Sandy flood insurance claims. FEMA is currently exploring the ability of the agency to force private insurers to disclose whether they manipulated policyholders to accept lowball settlements by hiding critical evidence.
Several senators from the areas impacted by flooding caused by Hurricane Sandy are demanding that FEMA force private insurance companies who wrote flood insurance policies under the “Write Your Own” policy program to produce all peer reviews by engineers and adjusters to facilitate the ability of policyholders to determine if their claims were properly evaluated.
While FEMA is responsible for paying flood insurance claims made pursuant to the National Flood Insurance Program, private insurance carriers write and service the policies under the "Write Your Own” program. Several senators have raised concerns that these private insurance companies may have engaged in unethical practices involving non-disclosure and manipulation of expert reports.
The meeting between FEMA and multiple senators in the Hurricane Sandy flood areas follows in the wake of a recent blistering decision by a New York federal judge against an insurance company that issued a flood policy under the “Write Your Own” policy program. The judge castigated the insurance company in the case for engaging in “reprehensible gamesmanship”.
Evidence produced in the case demonstrated conduct that should be concerning for all homeowners with flood insurance claims under the federal flood insurance program. The appalling details of the lawsuit included the fact that a report prepared by an expert for the insurance company was altered because it concluded that the loss was the result of covered sinkhole activity and that structural damage had occurred. These conclusions, which favored the policyholder, were reversed after the insurer retained a second engineering firm. While the original report was based on an actual inspection of the property, the follow-up report, which was designated as a “peer review”, involved only a review of photos included in the prior report.
Although this convenient revision of the initial conclusions might seem egregious enough, the insurance company failed to disclose the fact that the conclusions included in the so-called peer review were related to a prior report. This failure to produce the initial expert report in discovery explains the harsh criticism of the judge regarding the conduct committed by the insurance company. Further, the judge expressed concerns that the same engineering firm retained by this insurer performed similar peer reviews in other post-Hurricane Sandy flood claims. The judge suggested an investigation of such practices, which constitutes the likely impetus behind FEMA’s subsequent attempt to compel disclosure of such peer reviews.
You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].