Homeowners Insurance Lawsuit Alleges Software Manipulation

A New Jersey couple filed a homeowners insurance lawsuit alleging that their insurance provider manipulated data in its software program to shortchange their Hurricane Sandy damage claim. Charles and Beverly Mooney filed their homeowners insurance lawsuit in federal court against Selective Insurance. The couple stated that Selective defrauded them out of the sales tax for their claim and “intentionally manipulated” its claims software to reduce their payment amount.

Homeowners Insurance Lawsuit Seeks Damages For Lost Home

In their homeowners insurance lawsuit, Mr. & Mrs. Mooney cite the loss of their summer home in Toms River, New Jersey, in the 2012 hurricane. The couple received a claims check for $108,913 from Selective, but their homeowners insurance lawsuit claims that the software shortchanged them on the 7 percent sales tax. The suit cites that the company promised them that the sales tax would be included on the items listed in their claims form. However, the company’s claims software did not include sales tax calculations until late 2013.

Others Join Mooneys’ Homeowners Insurance Lawsuit

An attorney for the Mooneys stated other homeowners have come forward with similar claims against Selective and other insurers. The attorney told local reporters that at least three other homeowners may file homeowners insurance lawsuits to recover sales tax payments on their claims. The attorney also represents hundreds of other homeowners who have filed homeowners insurance lawsuits citing underpayment of their hurricane damage claims. Reporters contacted Selective for a response, but the company’s spokesperson was not available for comment.

“Superstorm” Victims File Homeowners Insurance Lawsuits

Hurricane Sandy became known as the “Superstorm” in October 2012. The storm was responsible for an estimated $65 billion in damages as it struck the beaches of New York and New Jersey. The storm also took the lives of 71 residents, injured hundreds of others, and left thousands of homes with severe damage. The slow response of many insurers, combined with allegations of fraud and underpayment, have prompted thousands of homeowners insurance lawsuits from victims.

Homeowners Insurance Lawsuits Prompt FEMA Probe

The rash of homeowners insurance lawsuits has sparked an investigation from the Federal Emergency Management Agency. The probe will determine if allegations from thousands of homeowners insurance lawsuits show a systematic pattern of fraud and manipulation by insurers. The allegations include the use of fraudulent and manipulated engineering reports to reduce or deny claims. A federal judge reviewing the homeowners insurance lawsuits cited “widespread gamesmanship” by insurers to defraud policy holders.

Source: Fox Business

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