Yesterday's announcement by Senator Menendez regarding the low-balling of flood damage estimates or the changing of the inspection reports to show that now damage was caused by the floods is not something new. It has been going on for years. The entire process is controlled by lawyers and they are the ones who pick the "experts", after they have fully vetted them to ensure that the "expert opinions" are acceptable to the insurer.
This has been going on in the entire insurance industry and we have already commented in our blogs and web pages about what is going on.
Our advice to the homeowners and other policyholders is: get your own expert. Stop complaining about the insurance company's expert or their lawyer, as they only defend their client (the insurer). You need to find an expert who would defend your position. This is how the process works.
We list below the article that appeared few hours ago in the news and also made the TV network news.
New Jersey's senior U.S. senator has called for a full investigation to determine how many superstorm flood-insurance claims were denied based on key reports that were improperly changed.
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WASHINGTON – New Jersey's senior U.S. senator is calling for a full investigation to figure out how many superstorm Sandy flood-insurance claims were denied based on shadowy practice that was recently revealed in a New York courtroom.
The office of U.S. Sen. Robert Menendez, D-N.J., released a letter today that is addressed to the head of the Federal Emergency Management Agency, asking for a report to Congress on just how commonplace it is for secret modifications to be made to engineering reports, and for those altered reports to then serve as the basis for the denial of structural flood-insurance claims.
Menendez also requested FEMA impose penalties for those companies involved, and that the agency create a plan to stop this practice and counter its root cause — a broken payment structure in the National Flood Insurance Program. FEMA covers all the losses of the NFIP, but private insurers service and write policies.
"While these actions were untaken by (private companies) — these insurance servicers ultimately work for and report to FEMA — making you ultimately responsible for their behavior," the letter reads.
The behavior Menendez is referring to was brought to light last month during a Long Island federal court hearing between homeowners and their flood-insurance carrier.
An engineer at U.S. Forensics, the firm that was retained by the defendant Wright National Flood Insurance to review damage at homes after Sandy, testified that he changed the report of a colleague without discussion and without visiting the property involved in this lawsuit.
The changes reversed the tenor of the report, shifting the cause for the damage from the superstorm to the accumulating effects of the house settling. That determination served as the justification for the insurance company to deny the claim for structural damage, a decision that cost the Long Beach, N.Y. homeowners as much as $170,000 in coverage that wasn't paid out.
Magistrate Judge Gary R. Brown surmised in a court order released last week that this practice of rewriting reports without justification — dubbed "peer review" by U.S. Forensics — may be widespread and "may have affected hundreds of Hurricane Sandy flood insurance claims – and possibly more."
Related: Judge rips Sandy insurer over flood report change, says "highly improper" practice may be widespread
Chip Merlin, a lawyer who specializes in post-hurricane flood-insurance lawsuits on behalf of homeowners, said in a letter urging New Jersey's federal court to adopt Brown's order — which required flood insurance companies in Sandy-related disputes in the Eastern District of New York to turn over all engineering report materials, including so-called drafts that had been changed — indicated that his team had discovered "dozens of instances" where U.S. Forensics's reports had been relied upon among the more than 400 Sandy cases they are handling.
U.S. Forensics has not responded to a message seeking comment. The Property Casualty Insurers Association of America, which lobbies for more than 1,000 member companies, declined to comment on the judge's order earlier this week.
Related: Flood insurance nightmare continues for Sandy families
Menendez has called congressional hearings to discuss what he has argued is a failure of FEMA to punish underpayments to homeowners by insurers as harshly as it does overpayments. This has caused insurers to be predisposed to try and avoid paying all or part of legitimate claims.
"The recent findings by Judge Brown appear to be the 'smoking gun' of a pervasive and intentional effort to lowball disaster victims who did the right thing and paid their flood insurance for years if not decades," he wrote in the the letter to Fugate.