GAO report warns of insurer bias on flood claims, recommends reforms

The GAO report comes after allegations surfaced last year that some private insurance companies were billing to the flood program damage that they should have covered.

“There is an inherent conflict of interest when the same insurer is responsible for assessing damages for its own property casualty policy, as well as for the NFIP policy, each covering different perils on the same property,” the report says. The “insurer that covers a policyholder for wind losses can have a vested economic interest in the outcome of the damage determination that it performs when a property is subject to a combination of high winds and flooding.”

Times Picayune