New Jersey-2022-SCR60-Introduced

Sponsored by:

Senator JAMES W. HOLZAPFEL

District 10 (Ocean)

SYNOPSIS

Urges U.S. Department of Justice to investigate certain claims handling practices related to Superstorm Sandy flood insurance claims.

CURRENT VERSION OF TEXT

As introduced.

A Concurrent Resolution respectfully urging the United States Department of Justice to investigate insurance company claims handling practices related to Superstorm Sandy flood insurance claims.

Whereas, Thousands of homeowners affected by Superstorm Sandy properly paid for flood insurance to cover their home in the event of flooding, but reports of delays and improper claims handling practices by property insurers have been increasing; and

Whereas, Insurance companies have a fiduciary duty to their insureds to act in the insureds best interest and to conduct claims handling in good faith, principles that are the basis for a fair and just system of insurance to compensate victims of property damage; and

Whereas, The Federal Emergency Management Agency works through private insurance companies to sell and administer flood insurance through the National Flood Insurance Program, into which thousands of victims of Superstorm Sandy have paid premiums, and on which these homeowners are now relying to cover their losses from the devastating storm; and

Whereas, A 2014 court case in the United States District Court for the Eastern District of New York, Raimey v. Wright National Flood Insurance Co., has revealed, in great detail, allegations that insurance companies handling Superstorm Sandy flood insurance claims, in potentially hundreds of cases, committed reprehensible practices including secretly rewriting engineering reports to change the reports' conclusions to avoid covering the loss, leaving insured homeowners to suffer the loss; and

Whereas, While this court case may be in New York, similar reports have arisen in New Jersey of insurance companies changing findings to deny coverage under flood insurance policies, and further investigation is necessary to obtain engineering reports, including any drafts of engineering reports, to determine how widespread this practice is amongst insurers administering the National Flood Insurance Program; and

Whereas, If proven to be true, claims handling practices such as those described may constitute fraud, and therefore, the United States Department of Justice should investigate this matter further to determine if any laws may have been violated and to hold insurance companies accountable; now, therefore,

Be It Resolved by the Senate of the State of New Jersey (the General Assembly concurring):

1. The Legislature respectfully urges the United States Department of Justice to investigate the claims handling practices of insurance companies handling flood insurance claims to determine if engineering reports or other investigatory activities were manipulated to fraudulently deny coverage to Superstorm Sandy victims, and if laws have been violated, hold those insurers accountable.

2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Secretary of the Senate to the Attorney General of the United States.

STATEMENT

A recent court case in New York, and similar reports in New Jersey, have revealed in great detail, allegations that insurance companies handling Superstorm Sandy flood insurance claims, in potentially hundreds of cases, committed reprehensible practices including secretly rewriting engineering reports to change the reports' conclusions to avoid covering the loss, leaving insured homeowners to suffer the loss.

This resolution urges the United States Department of Justice to investigate the claims handling practices of insurance companies handling flood insurance claims to determine if engineering reports or other investigatory activities were manipulated to fraudulently deny coverage to Superstorm Sandy victims, and if laws have been violated, to hold those insurers accountable.