That’s a trifling amount compared to the $8.1 billion in flood insurance payouts made to 132,000 Sandy victims. From 2011 to 2014, FEMA imposed just $742,000 in penalties on flood insurance contractors that were found to have overpaid claims, according to agency figures. Insurers can also be penalized by FEMA if they pay a claim later determined to be invalid, though in recent years those sanctions have been rare and light. Others say the industry knows the program is under financial strain and is trying to help preserve it so they can continue to collect fees for selling and serving policies. Lawyers for flood victims have suggested that fighting claims is so deeply ingrained in the insurance industry’s DNA that it is applying the same bare-knuckle tactics to the National Flood Insurance Program out of force of habit. He wrote in an email to The Associated Press that he was “not sure at all what the alleged conspiracy is or could be not to pay claims.” “There is simply no incentive … to try to guide the engineer to an opinion, or to try to find no coverage,” said Henry Neal Conolly, president of Wright Flood, the nation’s largest flood insurance company. The government pays insurers marginally more to approve a claim than to deny one. Most were merely processing claims for FEMA none of their own money was at stake. This time, though, there is no wind-versus-water fight, and it isn’t clear why any insurance company would have a motive to cheat. Homeowners made similar claims about doctored engineering reports after Hurricane Katrina, when some insurers were accused of trying to shift blame from the 2005 storm’s winds to its monster flood, which wasn’t covered by homeowner policies. FEMA has asked its inspector general to investigate. New York’s attorney general has opened a probe. “These unprincipled practices may be widespread,” Brown wrote in his Nov. Magistrate Judge Gary Brown ordered insurers to produce reams of additional records that could help reveal whether engineering contractors edited damage reports in ways that improperly minimized payouts to hundreds or even thousands of storm victims. Some engineers who worked the coast after the storm say a lot of homeowners were simply unaware of long-standing, but hidden problems exposed by the storm.īut the issue got the attention of a federal judge in New York after a Long Island family uncovered evidence that an engineer who examined their property had been instructed by a supervisor to reverse his initial finding that the flood caused irreparable structural damage. So far, there’s been a little proof available publicly.
#Wright flood insurance and brown and brown cracked#
Cracked and warped walls were written off as being due to old age. Now, two years later, lawyers representing about 1,500 homeowners are trying to prove that some e ngineering firms hired to inspect the damage issued bogus reports to give skeptical insurers ammunition to deny claims.īroken foundations, the lawyers say, were falsely blamed on poor construction or long-term settling of the soil.
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