The petition, filed in New Orleans Civil District Court, alleges the above companies have participated in an on-going scheme to rig the value of property damage claims paid by insurance companies to their insureds. They allegedly used damage-estimating software programs to engage in horizontal price-fixing as well.
The combination allegedly artificially held down property damage claim payouts with the intended goal of increasing the profits of each company involved. When Hurricanes Katrina and Rita struck Louisiana in 2005, virtually all of the property damage insurers were setting premiums and adjusting claims under this alleged scheme.
The lawsuit claims the companies coerced policyholders into settling damage claims for less than their actual value by editing engineering reports, delaying payments and forcing policyholders to go to court to challenge the estimates.
“This alleged scheme gave insurers an unjust advantage over policy holders, which they used before, during and after one of the greatest disasters this country has ever suffered, by reaping huge profits from the misfortunes of persons whom they pledged to protect from the risk of loss” stated Attorney General Foti.
“I believe this unjust advantage resulted in the unjust enrichment of themselves to the detriment of the state, policy holders, and commerce in Louisiana,” . “But to be clear, these abuses were not new to the recent hurricanes.”