I wish I didn’t have to write this blog. I say that because although we are the Policyholder’s Advocate, and I’d rather blog about policy issues, case law, and statutes—not about impartiality or fraud regarding a government agency’s handling of the Sandy Review Process. However, these topics are pertinent to the field of law and Merlin Law Group likes to keep you informed on all variables and challenges your claim may face.

Not that long ago FEMA’s head of their National Flood Insurance Program, Brad Keiserman, was touting the Sandy review process as a way to have an all-encompassing claims review process to pay back thousands of cheated policyholders. This process was a way to make amends after fraud was uncovered the first time.

Well, Brad Keiserman exited his post at FEMA to take a job at the Red Cross soon after starting the Sandy review process on May 18, 2015. Maybe he knew something we didn’t. . . .

Fast-forward one year to April 28, 2016, to a hearing in Washington, DC hosted by New Jersey Representative Tom MacArthur, a Republican serving the Third Congressional District. Rep. MacArthur had also called for the removal of FEMA Chief Craig Fugate last year before the Sandy review process was started. Renewing his call for Fugate to be removed, Rep. MacArthur shared new revelations from whistle-blowers that the agency’s process to re-examine insurance claims from Sandy was a sham. He was provided three affidavits outlining accusations of impropriety from several whistle-blowers who had worked on the review process set up by FEMA. Rep. MacArthur spoke about the fraud he has seen presented to him:

‘I have seen doctored engineering reports with my own eyes,’ and goes on to say, ‘I have seen doctored adjusters’ reports with my own eyes, where an adjuster wrote something was caused by flood and somebody else inserted the word ‘not’ caused by flood.

One of the whistle-blowers, Jeff Coolidge, an experienced insurance claims adjuster, said he reviewed approximately 1,000 flood claims, while working as a contractor for FEMA last fall—almost all of which he said he was required to deny or underpay.

I left the Sandy review process because it’s a sham,” Mr. Coolidge said. “I was literally losing sleep because I didn’t want to be a part of that fraud anymore.

One of the other whistle-blowers recounted his instructions before beginning the review process:

I also received instructions not to conduct a comprehensive evaluation of claims assigned to me in order to identify each time of property damage subject to insurance coverage, but rather was told to use software developed for the SCR by McKinsey & Company that produced a range of expected values for each claim based on the property’s square footage and approximate quality of construction.

If the name McKinsey & Company sounds familiar it’s because it was the company that created the delay, deny and defend way of life which lead to huge profits across the board for insurance companies.

I’ve written in the past about my frustrations with the Sandy review process. Recently I had asked a claim’s handler in the review process for an update on the review of some claims that have been in the “review process” 8-9 months. His response was three words “review in progress”. When I questioned him what has been done since he received the file his response was, “there are two statuses, ‘review in progress’ or ‘results of the review’. He couldn’t provide me a date for the ‘results of the review’ but can call me once he makes his decision. I understand this is an unprecedented process but the least you can do, Mr. Fugate, is provide some clarity as to how these cases are being reviewed and decided. If you will not give us accountability, at least give us clarity.

I’ll finish this unhappy blog with a quote from a former baseball player who was cheated of the Hall of Fame, Dale Murphy.

One of the more challenging things in life is not being the guy who does the cheating, but not saying anything about it and going along with it.

  • Excellent post Jason! Thanks

  • Great post Jason! This was worth writing about.

  • Guest

    Even with all the evidence of fraud, nothing’s being done about it. It’s surreal to know that our country is turning a blind eye to this corruption.

  • i phillip

    I am a homeowner who is going through this disaster. Someone drove through my home 12/13/15 and would you believe there is still no resolution? The side of my home was driven into by an SUV as well as my entire bathroom that he drove through. I thought the process would be better if I went through MY insurance company since he barely has any coverage. It is a nightmare..insurance companies engineer said everything was fine (city red tagged my home). He said he COULDN’T crawl into the attic to check anything. My adjuster (in house) didn’t know what her job was (according to her supervisor) when I questioned something..her manager said it was a training issue? My field adjuster was the only one who wouldn’t go up on the roof to check anything..he said see I can zoom in and see everything on my camera. Paid to have an engineer come out and evaluate the damage..(the man ran through 3 properties but the neighbors was just outside damage). Of course major damage, documented pictures, cracks getting worse all around my house..documented little cracks are now big cracks..insurance co wanted to go appraiser route right away (my appraiser is good but don’t feel it is fair for me to have to pay when my insurance co requests this) and worse I have no input, my insurance, my money, can’t cannot say anything? Now in last process umpire…been 2 weeks..still nothing back and of course I cannot get involved in that process either yet have to split the cost of it with insurance co? I feel there are “appraisers” out there that are not qualified to deal with structural damage..I also feel when you have major damage there should be a time frame put on the appraiser and/or umpire to get this resolved fast versus a minor claim..house is getting worse..popping noises that we never heard before in the house and cracking all around the house when there wasn’t any before..this is an unfair process for the homeowner who has to pay for their insurance and pay for appraiser and umpire yet cannot speak and get involved..there has to be rules and regulations, time frames, qualifications put on these appraisers and umpires

  • Good post Jason.


    Sorry to hear about your ongoing situation. I speak to you as a Public Adjuster, as well as an Insurance Appraiser / Umpire. Sadly, a lot of the things you described above are not uncommon in the insurance world. This is truly why there is such a need for well qualified and competent Public Adjuster’s, Insurance Appraiser’s and Umpire’s as well as Attorney’s that specialize in this field. There are numerous lawsuits going on right now regarding “Engineer Reports” that have been allegedly altered, are canned or are what is known in the industry as “Outcome Oriented”. I don’t know all the details of your situation but I believe that a good Public Adjuster could have made a huge difference in the handling and resolution of your insurance claim.

    Regarding appraisal, this is an alternative method for claim resolution that is indeed favored and even demanded by Courts at times. Your involvement should be with your appraiser in the capacity of providing a detailed description of “what happened” as well as any supporting documentation that you have that may be relevant. Your appraiser can ask you questions, do their own due diligence and estimate preparation. Appraisers typically try to get the appraisal resolved amongst themselves, but on occasion do have to get an Umpire involved to resolve their differences. Having said that, neither the insured’s appraiser, nor the insurance company’s appraiser should allow themselves to be manipulated or controlled by their respective employer. Appraisals, insurance claims and litigation take time and can be very stressful to say the least. Courts favor “Appraisal” for its efficiency, reduced cost (much less than litigation)and a theoretical non-litigious claim resolution process that eases the burden on an already over burdened court system.

    Based on what you have described above I suspect a good conversation with a well qualified attorney, that specializes in insurance claims litigation, would certainly be worth doing to get their opinion regarding the situation and facts surrounding you claim and its handling. There could possibly be bad faith or breach of contract issues among other things that may need to be explored by someone competent in that subject matter that can knowledgably advise you.

    I wish you luck….