Two government agencies investigating the handling of flood claims in the aftermath of the 2005 storm season offered stern criticism of both the insurance industry and the Federal Emergency Management Agency at a Capitol Hill hearing last week, but neither offered hard evidence of wrongdoing on the industry's part.
The main concern at a joint hearing of the Oversight and Investigations Subcommittees of the House Financial Services Committee and Homeland Security Committee was that insurers operating under the Write-Your-Own aspect of the National Flood Insurance Program could have pressured adjusters to cite only flood damages in cases where an actual evaluation might have shown significant wind-related damage as well.
Such a scenario would have put the burden of claims unfairly on the NFIP, and thus on taxpayers.
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