Albany, NY - March 4, 2015 - U.S. Senators Charles E. Schumer and Kirsten Gillibrand today called on Federal Emergency Management Agency (FEMA) to ensure that all impacted Superstorm Sandy flood victims are included in the ongoing settlement regarding fraudulent engineering reports issued by insurance adjusters, regardless of whether the policyholder has filed a lawsuit. According to federal court records and recent media reports, including a months-long investigation aired by 60 Minutes, there is evidence that private engineering companies, U.S. Forensic, LLC and HiRise Engineering, P.C., altered engineering reports so as to not fully reflect the true impact and damage caused by Superstorm Sandy to New Yorkers’ homes, which led to the unjust denial or underpayment of flood insurance claims. Evidence shows that these firms purposefully altered the analysis and conclusions of engineers who visited these homes first-hand and then used these altered reports as the basis to deny homeowners of legitimate claims of damage from the storm. These engineering firms are contracted by Write Your Own (WYO) flood insurance companies that are part of FEMA’s National Flood Insurance Program (NFIP), and ultimately, the Senators said that FEMA failed in its oversight of the NFIP program, which has caused even further damage and conflict for New Yorkers already stricken by Superstorm Sandy.
FEMA is currently in the process of settling the approximately 1,200 civil lawsuits pending in the U.S. District Court for the Eastern District of New York that were filed by victims of Sandy against the WYOs and FEMA regarding the claims process of the National Flood Insurance Program. Many of individuals that filed lawsuits were denied or underpaid in their NFIP claim following Superstorm Sandy, likely due to the doctoring of engineering reports. In light of this ongoing settlement, Schumer and Gillibrand today released a letter written to FEMA deputy associate administrator Brad Kieserman, urging that the settlement include provisions to resolve the legitimate claims of any policyholder denied by U.S. Forensic, LLC or HiRise Engineering, P.C., regardless of whether a lawsuit was filed. Also, the Senators’ letter said that the settlement should include provisions to resolve the legitimate claims of any policyholder who had may have had a claim denied by another firm, in addition to HiRise and U.S. Forensic, that is further determined to have used fraudulent practices in their engineering reports and payment of claims. Finally, the Senators said that all flood insurance policyholders impacted by Sandy must have access from FEMA to all engineering and insurance documents used to assess the damage on their home, in order to root out other cases of fraud.
Earlier this week, Senators Schumer, Gillibrand, Menendez and Booker called for new oversight hearings of the flood insurance claims of these homeowners through the National Flood Insurance Program, which is run by FEMA.
“The recent allegations of fraudulent engineering reports and other deceptive practices rampant throughout the FEMA-run National Flood Insurance Program makes your jaw drop. Evidence of engineering firms and insurance providers looking to undercut Sandy victims and underpay them for their Superstorm Sandy damage adds insult to injury, and is truly unacceptable. Thousands have filed lawsuits against FEMA and NFIP flood insurance companies due to denial or gross underpayment of their claims, and other homeowners simply didn’t file lawsuits, due to emotional and financial distress or genuine trust that the system wasn’t stacked against them. FEMA must ensure that all legitimate claims are included in the pending FEMA settlement, regardless of whether a policyholder has filed a lawsuit,” said Senator Schumer.
"It is reprehensible that FEMA officials were aware of fraud and apparently did nothing about. Instead, FEMA continued to fight victimized homeowners in court and denied them the insurance coverage they had paid for," said Senator Gillibrand. "Finally, homeowners are getting the money they deserve as the first wave of cases are being settled. But, FEMA has a responsibility to make every homeowner who fell victim to this fraud whole whether they filed a lawsuit or not, and we intend to hold FEMA to that standard."
Read the senators' full letter to FEMA here.