Fraud is generally defined as an act done with the intent to deceive or misrepresent others in order to attain or secure some unlawful gain or deprive a victim of a legal right. Different courts, states, and bodies of law throughout our country have their own unique causes of action based in fraud, or where fraud is the primary allegation.

Fraud (on behalf of insurance companies) is more common than people realize. As recently as last week, California’s Insurance Commissioner started an investigation into Aetna Insurance Company1 after Aetna’s former medical director admitted under oath that the Insurance Company would deny insurance coverage without ever actually looking at a patient’s medical records. This was Aetna’s custom and practice, as admitted by its former medical director.

This type of fraud is not exclusive to Aetna or medical insurance – this is common in property and disaster insurance as well.

In the aftermath of Hurricane Sandy (2012), we saw this all too frequently. In fact, this issue was so problematic that the New York Attorney General indicted several NFIP flood insurance company engineers and engineering companies for fraudulently altering engineering reports. The flood insurance companies used the fraudulently altered reports to support their denial of property owners’ proper claims for covered flood damages. For example, the insurance company engineer reports originally blamed the flood water for causing severe structural damage to the homes, but the reports were changed to say there was no structural damage, or the flood water did not cause the damage. The changed reports were used by the insurance companies to significantly reduce the claim payout, or outright deny the claim.

This issue is so common and pervasive that insurance industry insiders have blown the whistle on their former insurance company employers. Back in 2006, the Rigsby sisters, who were both former claims adjusters for State Farm, blew the whistle on their former employer and insurance industry titan State Farm. The Rigsby sisters said that after a thorough investigation of property owners Hurricane Katrina claims they frequently would reach the conclusion that the property damage was caused by wind (which would be covered by the property owner’s insurance policy with State Farm), but State Farm would change the conclusion and say that the damage was flood-related, and therefore not covered under the policy. State Farm would entirely disregard the conclusions reached by their licensed adjusters, and fraudulently change the conclusion to avoid payment on the claim. The jury determined that State Farm owed over $4 million in damages related to this fraud.

Insurance Company fraud is not as uncommon as people may think. If you believe that you are a victim of this type of insurance company fraud, you should contact an experienced insurance attorney.
1 February 12, 2018, California Department of Insurance Press Release, available at (last accesses February 19, 2018).

  • Tad Balzer

    This year more than any other here in Florida I see changed damage reports from field adjusters to desk adjusters and examiners. Isn’t this considered fraud as well? Citizens is (in my opinion) the biggest culprit, yet no one can make it change. This will continue to get worse unless we get real claims handling reforms. We need to remove the protection of company and independent adjusters that lowball estimates intentionally and those that are cutting back valid repairs in effort to save the carrier money. We need a homeowner able to sue the field adjuster for lowballing. We need to stop chipping at the fringes of this issue and go straight at the person(s) making the policy. This industry does NOT need to be this way. What does it say about us as people that we know going into a claim that the people that are supposed to help will fight you tooth and nail to cheat you and that is the norm………….. That is to be expected…………… Everyone claims outrage about it, but no one can get laws to prevent it. How is it that our morals and ethics are so easily purchased and helping our fellow man when he is down can so easily be turned to kicking them without a second thought or regret?

    • Emily Marlowe

      Tad – I totally agree. Here in Texas we are (fortunately) able to sue adjusters for their bad behavior. Ultimately, the insurance company is usually still responsible for the bad acts of its adjusters. I encourage you to contact your Florida politicians (local, state, and national) regarding your concerns with the insurance industry and laws. They are the ones who have the power to change the laws, and remember to encourage your friends, neighbors, and family to do so as well = power in numbers.

      Emily Marlowe

  • Melissa Brandmeyer

    How come these engineer companies are not stopped from doing this? It happened to us not by one company but by two companies on one claim. The one engineer was behind the Sandy scandal. It’s upsetting and it has cost us everything including almost our lives.

    • Emily Marlowe

      Melissa – I would love to talk more about this with you, was the issue you referenced related to Hurricane Harvey or Hurricane Sandy? There are certainly actions that we can take legally to attempt to punish them and hold them accountable. During Hurricane Sandy, myself and Rene Sigman (Merlin Law Group Attorney and Regional Head of Litigation) were at the fringes of these lawsuits against the bad engineering companies. As a result of our efforts, one of the engineering companies was raided by New Attorney General’s Office and later indicted for bad actions.