Criminal investigation launched in New York aims to bring clarity to flood insurance issues

Flood Insurance News

Criminal investigation will seek to uncover the issues associated with Hurricane Sandy

The New York Attorney General’s Office has launched an official criminal investigation into allegations regarding government contractors and their work relating to 2012’s Hurricane Sandy. The powerful hurricane hit the state quite hard, causing millions of dollars worth of damage. The federal National Flood Insurance Program has been struggling to accommodate the cost associated with the disaster, facing allegations of rejecting claims unjustly and working with third party organizations that have mishandled insurance policies.

Growing number of homeowners suggest that false engineering reports prevented their claims from being approved

The criminal investigation was launched as a response to the rising number of civil lawsuits that claimed engineering reports were secretly rewritten after the impact of Hurricane Sandy. These revised reports suggested that homes were damaged by structural defects as opposed to severe flooding. The revisions allowed the National Flood Insurance Program to reject claims coming from some homeowners, but the organization may not have played a role in revising the reports itself.

Flood insurance program continues to struggle financially

Flood Insurance NewsFlood insurance remains a controversial issue in the United States. Flood coverage is provided by the federal government, as few insurance companies are willing to handle the risks associated with floods on their own. For years, the federal insurance program has been struggling financially, putting it in a dangerous position if a natural disaster were to strike. Hurricane Sandy compounded the organization’s financial issues and some of those who had their claims approved by the National Flood Insurance Program are still waiting to receive the entirety of their claims payments.

Engineering firms may have submitted falsified reports to help insurers avoid claims

Some engineering firms have been named in the criminal investigation. These firms are accused of filing false engineering reports concerning the damage that some properties experienced during Hurricane Sandy and the weeks after the disaster. New York officials will continue investigating the matter well into the new year and if firms are found to be guilty of filing false reports, they will face legal action according to state laws.

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