Class-Action Suit Filed Over Isabel Claims
NU Online News Service, May 11, 4 :14 p.m. EDT? A prospective class-action lawsuit filed today at the U.S. District Court in Baltimore accused seven insurance carriers of misconduct in handling thousands of homeowners' claims from Hurricane Isabel last year. [@@]
The suit alleges that the insurers named in the complaint provided inadequate benefits to thousands of people with flood insurance policies, who suffered damages to their homes from the hurricane last September.
The insurers named as defendants in the complaint are: State Farm Insurance Companies, Omaha Property and Casualty, Travelers Property Casualty Corporation, USAA General Indemnity Company, Selective Insurance Company of the Southeast, Indemnity Insurance Company of North America, and Harleysville Mutual Insurance Company.
The complaint states that "thousands of homeowners" in the affected regions?Maryland, North Carolina, Virginia, West Virginia, Delaware, New Jersey and Washington, D.C.?saw devastating damages from flooding during Hurricane Isabel.
Homeowners in the case were insured against flood losses by insurers participating in the National Flood Insurance Program?a federal program designed to protect homeowners from losses associated with a flood catastrophe.
Their suit alleges that after the massive storm, insurers "mishandled claims" from thousands of Hurricane Isabel victims and "ultimately failed to pay proceeds to which policyholders were entitled." The complaint contends that "delays and failures in the handling of these claims" left thousands of people living for months in trailers, temporary shelters and rental apartments while their homes remained uninhabitable.
The class-action lawsuit alleges wrongful conduct by these insurers, including:
? Flood victims were told that they wouldn't be paid if they didn't sign the insurance company's adjuster's proof of loss within 60 days. As a result, the complaint alleges, many policyholders signed proofs of loss prepared by insurer adjusters, even though they strongly believed that the adjusters had underestimated the scope of damage as well as the associated costs of repair.
? The insurers settled claims using price data and construction estimating software that didn't reflect the actual cost of repair and renovation work following a natural disaster. As a result, many Hurricane Isabel victims have been forced to settle their claims at a fraction of the actual cost of repair, the complaint charges.
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