MARCH 13, 2015
Merlin Law Group
filed a class action lawsuit in Federal Court today alleging that
sales tax was not being paid to many Superstorm Sandy policyholders
with flood insurance claims insured by Selective Insurance. Some must be wondering
that if policyholders cannot trust insurance company engineering reports, why
should they trust that the estimates of damage made by the insurance companies
own estimators?
Merlin Law Group
attorneys Robert Trautman and Chase Mathis were complaining that some of the
Superstorm Sandy WYO flood estimates did not have sales tax included. I asked
if the tax was included in line items of the estimates rather than being shown
at the end of the estimate. I knew we were on to another Superstorm Sandy
wrongful claims practice when Chase Mathis said that the adjuster told the
policyholder they were included, but the line item prices were the same as
other estimates in our office which added tax at the end of the estimate.
Superstorm Sandy policyholders have been duped again through another ingenious
method of claims corruption.
The only way
somebody could determine that the sales tax was not included on a line item
basis after being told they were included would be to have access to a price
list from the software vendor listing the material and labor prices without the
sales tax. Policyholders do not subscribe to computerized price lists that
insurance companies use. There was no way for them to uncover the deception.
Whenever an insurance company representative says “trust me” to anybody that
has been through the Superstorm Sandy claims process, I guarantee you that they
are grasping for their wallets to make certain the insurance company is not
stealing from them again.
Xactimate is the
insurance industry leading computerized estimating software. While the company
that sells it, Xactware, claims that it "makes every effort to
ensure" accurate pricing information, it was terribly wrong for many areas
along Coastal New Jersey and New York immediately after Sandy struck. The
software company even warns that "actual market prices can vary and change
rapidly." Those factors changed immediately after Superstorm Sandy, but
most adjusters were more interested in doing as many estimates as they could
rather than doing fewer and making less money. It takes more time to estimate
losses by being more accurate and taking time to obtain better local pricing.
While Xactware "strongly recommended" that its "customers
monitor their local markets for any such changes and adjust their estimate
pricing," few did. The result has been to cause a second disaster which
has led to all these lawsuits and complaints of underpayment. Avoiding sales
tax through deception simply adds to the underpayments.
To me, it is
heartless to steal money through a system of deceit that is nearly impossible
to catch—especially after a disaster when people are most vulnerable. Many
policyholders simply gave up and abandoned their homes because they could not
rebuild with what the insurance company gave them. This lawsuit helps put an
end to this practice and sheds more light on the extent of the wrongs committed
on those counting on insurance for their peace of mind.
For more information
on the Sandy Class Action please visit www.ClassActionSandy.com.
Source: http://www.propertyinsurancecoveragelaw.com
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Associated Press
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Lawsuit: Insurance company manipulated software
after Sandy
By JOSH CORNFIELD
Associated Press
A New Jersey couple sued an insurance company Friday,
claiming it defrauded them out of the sales tax in their Superstorm Sandy
claim, and their lawyer said others might also have been affected.
Charles and Beverly Mooney sued in federal court, seeking
class-action status and alleging that Selective Insurance "intentionally
manipulated" its insurance claim software to shortchange the couple. The
suit asks for the Mooneys' claim to be redone with the sales tax costs and
seeks other damages.
A spokeswoman for Selective wasn't immediately available for
comment.
The Mooneys' summer home in Toms River was wiped out by the
storm, and they're still struggling to come up with the money for repairs.
Selective paid them for what it said it owed them, but Charles Mooney said it
wasn't enough to fix the house and he is paying out of pocket to finish the
work.
"I'm not saying that the sales tax that they withheld
from me is going to be the difference, but it's certainly not helping,"
Mooney said.
The Mooneys were paid $108,913, but the lawsuit said that
doesn't include the required 7 percent sales tax "despite Selective's
representation to the contrary."
The couple said they were told by the insurance company that
sales tax was included on individual items in the claim, but the lawsuit said
that functionality was not available in the software Selective used until later
in 2013.
The suit comes after Federal Emergency Management Agency
officials agreed this week to provide Sandy victims who think their insurance
claims were not fairly paid out a chance for a review. The review could include
up to 144,000 claims and won't limit corrective action to the 2,200 that are in
litigation.
There have been allegations of fraud involving how some
insurance companies assessed damage after the October 2012 storm that killed 71
people in the state and cost the country $65 billion. Insurers have denied any
wrongdoing.
Attorney Chip Merlin, who filed the suit for the Mooneys and
represents hundreds of other homeowners who suffered damage from Sandy in New
Jersey and New York in cases against insurance adjusters, said three other
homeowners have reported similar sales tax issues and be believes those cases
are likely just the beginning.