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Here we go again: Altered hurricane damage reports with a twist

If you missed this recent New York Times story, please read it and see if all this sounds familiar: Homeowners believe engineering reports on structural damage caused by Hurricane Sandy have been altered to minimize insurance payments.

Some Coast homeowners also found that engineering reports were altered after Hurricane Katrina, leaving insurance companies less money to pay for wind damage.

But in the case of Sandy, reports have been changed to minimize flood damage, homeowners say, with more than 500 "doctored" reports discovered. That's a real head scratcher because the insurance companies don't cover flood damage. They just adjust the claims and pass along the bill to the National Flood Insurance Program.

Insurance industry representatives pointed out in the Times article that they have nothing financially to gain from minimizing flood claims.

But longtime claims adjuster David R. Charles told the Times that insurance companies are "naturally oriented toward minimizing payments."

“The reason that the engineering reports are like this is they know where their bread is buttered,” said Charles, now a public adjuster. “It’s a sword that dangles over the head of every adjuster, every engineer.”

This is unsettling news as we pay hefty premiums for property insurance and await the next hurricane season.

Lawsuits, we learned, are less than satisfactory at sorting out battles of the experts. They take too long for property owners who want to put their houses back in order.

The most infamous case involving an altered engineering report after Katrina, Rigsby v. State Farm Fire & Casualty Co., is still being litigated. A jury found in March 2014 -- more than nine years after Katrina -- that State Farm defrauded the National Flood Insurance Program by blaming tidal surge for destroying a North Biloxi home. The first engineering report said wind destroyed the house. State Farm insisted on a second report from the engineering firm it hired. Surprise! The second report blamed flooding.

State Farm has appealed the jury's decision and a federal judge's finding that the company owes $750,000 in damages and $2.9 million in attorneys' fees for all those years of litigation. The Fifth U.S. Circuit Court of Appeals, no friend to homeowners in previous Katrina cases, just heard appeal arguments.

Maybe we'll have a decision by Katrina's 10th anniversary.

Regardless, the news out of New York and New Jersey seems to confirm that outcome-oriented damage reports will continue to plague property owners.