Senator: Insurers Systematically Denied Sandy Homeowner Claims
Investigators from the New York state attorney general's office on Feb. 18 carted off boxes of documents from the Uniondale, N.Y., office of GEB HiRise, an engineering practice that had been employed by an insurer to inspect homes damaged by Superstorm Sandy in 2012. The probe by the attorney general, Eric Schneiderman, amplifies charges by homeowners in the New York City area and four U.S. Senators, who have accused insurers of conspiring with engineering inspectors to limit payouts.
In November and December, attorneys for homeowners filed lawsuits in federal court in Brooklyn, N.Y. One of the lawsuits accused GEB HiRise of manipulating the inspection reports to limit payouts by insurers. It accuses a non-engineer company employee of altering a report provided to the company by a licensed engineer it had hired and affixing that engineer's professional seal to the changed version of his report without his knowledge.
The lead plaintiffs, Stephen and Sarise Dweck, own a home in south Brooklyn that was flooded on Oct. 29, 2012, the day the storm struck the area. The Dwecks had a flood insurance policy with Hartford Insurance Co. of the Midwest, with a coverage limit of $250,000.
According to the Dwecks' complaint, GEB HiRise assigned engineer Harold Weinberg to inspect the Dweck home in January 2013, and his report, dated two months later, stated that a surge of flood waters washed out "much of the interior of the cellar space and the interior of the first floor." No major damage to the building proper, including the cellar slab and foundation walls, existed prior to Superstorm Sandy, Weinberg wrote. He affixed his seal and submitted the report to GEB HiRise.
In the days after, the Dwecks allege, the company's director of construction services, Matt Pappalardo, "altered Weinberg's professional report by removing the findings and observations" and "adding opposite conclusions." Among them was an assertion that the damage to the home was preexisting and caused by consolidation of soft soil.
The Dwecks' lawsuit further charges that the insurer then used the report to deny the majority of the Dwecks' claim.
Pappalardo could not be reached for comment, but Joe Celentano, GEB HiRise's chief executive, says his company "has a 15-year history of ethical business practices" and that it is cooperating fully in the probe. A statement from The Hartford, parent of the insurer involved, says it has denied the allegations and has a motion to dismiss them before the court. After learning that an engineering report from a vendor may have been "improperly altered," Hartford says, it "arranged for a new report by an independent engineer" and adjusted the claim based on the new report. Hartford adds that it suspended further use of the engineering firm.