U.S. Senators in New York and New Jersey are calling on FEMA to investigate how insurance claims related to Superstorm Sandy were secretly rewritten to favor insurance companies at the expense of homeowners.
It was only by chance Deborah Ramey, of Long Beach, N.Y., discovered an engineering report about her home was rewritten to say that it wasn't Sandy that damaged her home and, thus, the damage was not covered by insurance.
Ramey sued, and during litigation a federal magistrate discovered it was common practice for insurance reports to be rewritten.
The judge ordered all Sandy-involved insurance companies to turn over thousands of draft reports to other homeowners who may also have been similarly affected.
Insurance lawyers say the judge's order is unprecedented, and could be dramatic, depending how widespread the practice of rewriting was.
Some lawyers, however, anticipate the order will encourage insurance companies to offer more favorable settlements to homeowners.
"Time and time again, we meet with clients who have legitimate damages that are covered but that their claims are denied or severely underpaid," says Tom Maligno, who helps run the Disaster Law Clinic at Touro Law School.
The insurance company involved in the original lawsuit denied any wrong doing and is appealing the judge's ruling.
