Years after Fidelity National Property & Casualty denied their flood insurance claim in the devastating wake of Hurricane Sandy, Bob Kaible and Deborah Ramey of Long Beach, New York can celebrate a victory. New York Attorney General Eric Schneiderman unsealed a 50-count indictment against the engineering firm whose allegedly fraudulent reporting practices led to the denial of Kaible and Ramey’s flood insurance claim, along with potentially thousands of others.
Kaible and Ramey’s Long Island home was so heavily damaged in Hurricane Sandy that it was condemned by the city. Yet, the engineering report, compiled by Long Island-based HiRise Engineering, stated that the house had incurred no structural damage as a result of the storm. Based on that engineering report, Fidelity National denied Kaible and Ramey’s flood claim.
Engineering reports are commonly commissioned by insurance companies to document the damage done to a property in the event of a natural disaster. Unfortunately, inaccuracies and outright fraud are becoming a growing trend, as evidence continues to mount that engineers are often supplied with pre-filled forms, or their reports are simply altered after they’re handed off to superiors.
After months of stalled efforts to gain clarification from Fidelity National, Kaible and Ramey were finally put in touch with the engineer who inspected their home. It was only then that the pair discovered the report filed by the engineer was starkly different from the one on record with the insurance company.
After the insurance company again refused to pay their claim, the two filed a lawsuit represented by Houston firm Mostyn Law. In the course of investigating the Kaible and Ramey case, Mostyn uncovered other engineering reports that were changed after the fact. It appeared to be an effort by insurers to avoid paying out valid claims.
“There was evidence that engineering firms engaged in fraud and took advantage of homeowners during one of the most traumatic times of their lives. These families lost their homes in the storm, and their insurance companies falsely told them there was no structural damage. That meant that they wouldn’t be able to rebuild,” said Steve Mostyn, founder of Mostyn Law, in a recent media statement.
Earlier this year, a joint investigation by PBS and NPR uncovered systematic fraud perpetrated against homeowners by private insurance companies as well as the Federal Emergency Management Agency (FEMA). As seen in the video below, the report found that insurers acted in tandem with FEMA to generate millions in illegal profits at the expense of thousands of residents who were left homeless.
Individual homeowners and attorneys independently alerted the New York A.G.’s office of potential fraudulent activity by insurers and engineering firms. Schneiderman’s indictment targets HiRise Engineering and former HiRise project manager Matthew Pappalardo. Cases against firms located outside New York are being referred to the U.S. Department of Justice.