An engineering firm that performed work for a unit of leading insurer Hartford Financial Services Group stands accused of cheating victims of 2012’s Superstorm Sandy by secretly falsifying damage reports related to homeowner claims.
Hartford is the second U.S. insurer to be tied to accusations of faking damage reports—a practice attorneys representing Sandy victims believe “may be widespread.”
Roughly 1,000 cases of homeowners and other policyholders are pending in a federal district court, awaiting decision from Judge Gary R. Brown, a Bloomberg report says.
J. Steve Mostyn, an attorney for Sandy victims, sent a letter to Brown this week claiming engineering firms assessing damage changed reports to eliminate flooding as the cause, and disputed a claim from a lawyer for Wright National Flood Insurance Co.—another insurer accused of links with falsifying reports—that “there was no evidence that other agents or contractors use similar engineering practices.”
Mostyn detailed the case of Brooklyn residents Stephen and Sarise Dweck, whose home was seriously damaged when the storm surge filled the home’s cellar and “washed out” most of the first floor. The Dwecks, who were insured against flood damage through Hartford Insurance Co. of the Midwest, had their claim denied after a version of the damage report was allegedly altered to remove the description of the flooding damage.
After the couple complained, Mostyn says Hartford Financial suggested a new engineer be selected to produce another report “nearly one year after the storm.” (continued.)
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There is “mounting evidence that altered engineering reports are not isolated,” wrote Mostyn.
Hartford responded with this statement: “When The Hartford was notified by the claimant of the potential of an altered report, we asked for a new report by an independent engineer so the claim could be appropriately adjusted. Storm Sandy was a devastating storm for many individuals and small businesses, and our focus as a company is on helping customers recover following a loss.”
In a separate racketeering lawsuit against Wright, policyholders allege the insurer “systematically sought to underpay legitimate claims” through “fraudulent engineering and claims handling analysis.”
In October, Brown ordered that Wright could rely only on the initial engineer’s report in determining payment on certain Long Beach claims related to flood damages, hinting that the process “may have affected hundreds of Hurricane Sandy insurance claims—and possibly more.”
Sandy caused about $60 billion in damages in three Atlantic states, killing more than 100 people. Insured losses from the event are still being determined.
