All estimates of damage, including draft estimates of damage made by adjusters, have been ordered to be produced in a Superstorm Sandy flood damage case.1 Typically, insurance company flood attorneys have made the same arguments they made regarding drafts of engineering reports—“We and our clients do not have them, judge."

This evasive discovery argument lead to the finding that certain WYO attorneys were not turning over the very relevant altered engineering reports. The obvious question is whether the same thing was going on with the estimates of damage?

It would seem those same insurance company flood attorneys would want to make certain the estimate they are relying upon is not bogus or a revision made in bad faith to lowball a policyholder. Most attorneys would think that as part of the effort to provide honest evidence and to prepare an honest defense that the flood attorneys would simply ask the adjusters who prepared the estimate to provide any revisions to initial estimates and the reasons the revisions were made. Why would they "consciously avoid" such inquiry unless they suspected similar foul play?

A number of attorneys in our office have been asking the same question and we are following up on this discovery issue. It does not mean that all revisions are wrong because revisions made in good faith to truly be more accurate should always be welcome. However, experience has taught us that transparency in the revision process is needed to make the determination if drafts were revised in good faith or with ulterior purpose.

While I applaud the recent efforts by FEMA leadership to settle cases in litigation, revised estimates should be part of FEMA’s overall investigation of claims conduct by the WYO carriers—even if the current cases get resolved.

1 Sauta v. Selective Ins. Co. of America, No. 3:14-cv-176 (D.N.J. Mar. 23, 2015).


  • Gus Darmani

    It’s the field notes you are seeking. The diaries kept by most adjusters in the field than transcribed into the estimating systems- If there are drafts, the software servers would contain the original drafts listed by dates uploaded, unless they have been purged at the server level. From my experience and training the adjusters would not have uploaded any details that would later get the claim kicked back by the inside adjusters, for speed of payment of the adjusters fee, unless the adjuster was new to the practice of field inspecting.
    The systematic process of undervaluing claims comes from a point of view of us vs. them, so prevalent in the adjustment community. If anything comes from all this litigation and review, hopefully it will be the separation of adjustment talent pools between the for profit providers and the WYO providers. In my opinion the problems associated with this matter are directly related to having adjusters who are trained to deny claims and mitigate coverage liability, perform claims under the NFIP program. The average adjuster doesn’t seem capable of distinguishing between the two very different modus operandi.

  • Roger Poe

    My understanding is that insurance adjusters electronic files are “locked down”, once they hit “Enter” on a keyboard. They cannot alter the file, but can always add to it, and that it can only be “unlocked” by court order.

    Is that true?

  • James Purcell


    From my experience CAT adjusting, what you have heard is not typical. The estimate uploaded to the desk adjuster has been finalized by the field adjuster but can still be changed to an ‘in-progress’ status and changed by person reviewing the file. The system is designed so the examiner can correct typos, duplicative damages, correct minor errors, etc. The company I worked for last had its own proprietary file tracking system (separate from XactAnalysis or Xactimate) that prevented me from making changes once the file was completed, so if new information came in I would need the inside adjuster to unlock the file to gain access. However, this has nothing to do with the estimate data file itself which can be still be modified on either end. I have never heard of a court order being required to re-open a data file on a claim so I have no knowledge of that.

    I think the primary concern Chip is raising regards certain situations that have occurred in the past, where an inside examiner-having never seen the property and often having limited field experience-overrides the on-site adjuster’s estimate and opinion to lower the estimate total. If that was occurring on a systematic scale, serious repercussions should be levied.