GREENBELT (AP) — Victims of Tropical
Storm Isabel are seeking millions of dollars in
compensatory and punitive damages, alleging that
insurance companies and top federal officials conspired
to low-ball their insurance claims.
Mid-Shore residents from Oxford, Tilghman, Neavitt,
Stevensville and Grasonville are listed as plaintiffs in
“They believe that they have been financially and
emotionally raped,” said attorney Martin H. Freeman,
after filing the suit Wednesday in U.S. District Court
in Greenbelt on behalf of 141 plaintiffs from 71
families. “They also believe ... that the people who
have done this to them are invulnerable and are going to
get away with this.”
The families claim they have been forced to raid
their savings to rebuild, live in cramped
government-supplied trailers or subsist in homes
contaminated by sewage and mold.
The lawsuit names 57 defendants, including the
Federal Emergency Management Agency, NFIP subcontractor
Computer Sciences Corp., and various insurance companies
According to the suit, Computer Sciences Corp.
trained sales agents in seminars and with written
materials to tell customers they would be fully
compensated under the National Flood Insurance Program,
while at the same time training insurance adjusters to
follow incorrect and overly strict guidelines on what
As a result, policyholders were shortchanged hundreds
of thousands of dollars in some cases.
The lawsuit also alleges two forms of conspiracy to
commit fraud, as well as contract interference and
breach of contract.
For four of the five claims, the suit seeks $1
million in compensatory damages plus punitive damages
for each plaintiff. It also seeks $250,000 per plaintiff
for the breach of contract charge.
A spokesman for FEMA, which is part of Homeland
Security, said officials would not comment on pending
But in testimony before Congress in April, David
Maurstad, who runs the National Flood Insurance Program,
said that “there is a fundamental misunderstanding” of
its intent. Maurstad said the program was “never
intended to restore policyholders to pre-flood
condition; it was designed to help them recover.”
Critics of the program contend that sales agents
marketing flood insurance say homeowners will be fully
restored, minus the deductible, to their “pre-flood
conditions.” This language also is found in the Flood
Insurance Reform Act of 2004.
Maryland Insurance Commissioner Alfred W. Redmer Jr.,
who testified before a congressional subcommittee
reviewing the flood program this spring, said the
lawsuit came as no surprise.
“Quite frankly, we’re going to continue to have
unhappy citizens, and we’re going to continue to have
litigation until the flood program gets fixed,” he
Oxford’s Steve Kanstaroom, a pattern recognition and
fraud detection expert, is an advocate for people he
says have been defrauded by adjusters. He said the
lawsuit would not be possible without Redmer’s
“I suppose [the lawsuit] means hopefully they can
receive the compensation they were entitled to and
justice for the wrong-doing that destroyed their lives,”
said Kanstaroom, who is not a plaintiff.
As of Wednesday, 85 Maryland families still were
living in trailers, according to FEMA. In Oxford, one
family still is living in a trailer, but Oxford Town
Clerk Lillian Lord said their house is nearly complete.
The agency recently sent eviction letters to about seven
trailer families that were either not working to find
permanent housing or violating provisions of their
leases, said spokeswoman Niki Edwards.
The lawsuit comes nearly 21 months after Isabel
struck Maryland in September 2003, and five months after
a letter was sent to FEMA, CSC and several others
involved in the claims process demanding full payment on
Another lawsuit filed on behalf of thousands of
victims last year alleging that seven insurance
companies systematically shortchanged policyholders is
pending in federal court.
Kanstaroom, who runs the Web site www.femainfo.us,
said people from 13 states have entered information on
the Web site indicating they wish to be part of legal
action. He said he expects litigation from several other
states will follow this lawsuit.
Staff writer Sarah Ensor Pearce contributed to this
when .."David Maurstad,
who runs the National Flood Insurance Program,
said that “there is a fundamental
misunderstanding” of its intent....the program was
“never intended to restore policyholders to
pre-flood condition; it was designed to help them
recover.”.. I knew there was going to be
trouble... WHAT good is insurance that is just
going to help??? MINIMAL, I'd say... so by this
logic, after a flood, the insurance will pay for a
wet-vac... but the REST is up to the homeowner????
What about all the rest of the resulting damage???
If they're worried about fraudulent claims, there
will probably be a few....they will have to be
denied on a case-by-case basis.... MOST everyone
else just wants to get the damage re-paired and
get on with their lives...The overall problem with
Insurance companies is that they only want to
RECEIVE payments... they NEVER want to PAY OUT...
I'll bet they don't even have an Accounts Payable