Download Report

MONDAY, DECEMBER 29, 2014
BUSINESS
Insurers dogged by claims
of slanted Sandy reports
JACKSON CENTRE: In this Oct. 22, 2014 photo, Airstream travel trailers line the factory floor as they are assembled at the
Airstream factory in Jackson Center, Ohio. Not only are the Airstream trailers still being built by hand at the same western Ohio
site that has produced them for the past 60 years, but the company also can’t roll them out of there fast enough to meet the
demand these days. —AP
Flying high: Airstream
can’t keep up with demand
JACKSON CENTER: Bob Wheeler still gets
the question sometimes when people find
out he runs the company that builds those
shiny aluminum campers: “Airstreams? They
still make those?”
Not only are the retro-looking “silver bullet” travel-trailers still being built by hand at
the same western Ohio site that has produced them for 60 years, but the company
also can’t roll them out of there fast enough
to meet the demand these days.
The instantly recognizable silver bubble
design — inspired by airplane fuselages —
hasn’t been tweaked much since the first
Airstreams took to the open road in the
1930s on the way to becoming an American
icon. The polished campers have cameoed in
Hollywood movies and even quarantined the
Apollo 11 astronauts when they got back
from the moon. They have also inspired a
legion of devotees who socialize with one
another at Airstream caravans and rallies all
over the world — including an annual Ohio
jamboree known as “Alumapalooza.”
“Any time we’ve seen an Airstream, it’s like
the clouds part and an angelic choir starts
singing,” says Cliff Garinn, a 49-year-old college career counselor from Dallas. He and his
husband bought a new one in April and are
already trading up to a larger model for frequent weekend camping trips and summer
vacation.
Airstream builds 50 travel-trailers every
week at the plant in Jackson Center, all
gleaming and aerodynamic and riveted by
hand. The backlog is about three months,
and ground has already been broken on a
major expansion at the factory north of
Dayton that eventually will increase production capacity by 50 percent.
The RV industry was dealt a body blow by
the Great Recession but has rebounded with
gusto. Shipments in 2014 are expected to be
up more than 8 percent, following the best
October in the industry in nearly 40 years.
Production next year is expected to return to
levels seen before the economy tanked.
Big bubble
Airstream — owned by the larger Indianabased RV maker Thor Industries — is riding
the wave, surging with three record years in
a row. Wheeler says shipments now are
about twice what they were during the best
days before the recession.
Besides a better economy, Airstream is
benefiting from a big bubble of Baby
Boomers, many now choosing not to wait
until their 60s to buy one, and a new wave of
desire for the classic designs of America’s
yesteryear — even if they command top dollar. New Airstreams run $42,000 to $140,000.
“For us, the Airstream just represented
this beautiful piece of machinery, this beautiful design that other trailers and RVs don’t
give you,” says 46-year-old Kate Gilbert. She
and her husband, Iain, sold their house in
San Diego this year and now live full time in
their 27-foot solar panel- equipped
Airstream, traveling the country.
Tara Cox, a 40-year-old magazine editor
who wrote a book called “Airstream: The
Silver RV,” notes the fandom bordering on
fanaticism that the trailers inspire, besides
the fact that they cost more than other RVs,
usually have less storage space and require
more maintenance to keep the outside looking nice. She compares Airstream owners
with Harley-Davidson riders who baby their
bikes.
“It’s that labor of love,” she says.
Baby Boomers are still the heart of the
demographic, but the company is actively
reaching out to younger people, using social
media to show them how an Airstream could
fit their lifestyles. It’s also testing less-expensive, lighter and easier-to-tow designs that
Wheeler says might be “less intimidating” to
younger buyers.
Airstream got an injection of hip recently
when it collaborated with the Columbus
College of Art and Design to plan and build a
camper with a workspace and living area
aimed at people in their 20s and 30s whose
jobs allow them to work from anywhere. The
company says the design elements —
including a rear hatch that opens the convertible work area to the great outdoors —
will be incorporated into future production
models.
Meggin Hurlburt, a 34-year-old paralegal
from San Diego, says the Airstream purchase
was an investment in her family. She’s married
with a 6-year-old son. She says the vintage
look and the reputation for durability drew
them in, even with the $70,000-plus price tag.
“We didn’t want to wait until we were
retired because we wanted to enjoy it now,”
she says. “It’s not like the white box trailer
that’s going to fall apart in 10 years. We
bought this knowing we can give it to our son,
and maybe he can give it to his children.”
—Agencies
NEW YORK: Superstorm Sandy hit the East Coast,
flood insurance companies working for the
Federal Emergency Management Agency dispatched an army of structural engineers to do
some detective work.
Their assignment: Find out how much damage
to policyholders’ homes was caused by surging
seawater and how much predated the storm.
Now, two years later, lawyers representing
about 1,500 homeowners are trying to prove that
some engineering firms hired to inspect the
damage issued bogus reports to give skeptical
insurers ammunition to deny claims.
Broken foundations, the lawyers say, were
falsely blamed on poor construction or long-term
settling of the soil. Cracked and warped walls were
written off as being due to old age.
So far, there’s been a little proof available publicly. Some engineers who worked the coast after
the storm say a lot of homeowners were simply
unaware of long-standing, but hidden problems
exposed by the storm.
But the issue got the attention of a federal
judge in New York after a Long Island family
uncovered evidence that an engineer who examined their property had been instructed by a
supervisor to reverse his initial finding that the
flood caused irreparable structural damage.
US Magistrate Judge Gary Brown ordered
insurers to produce reams of additional records
that could help reveal whether engineering contractors edited damage reports in ways that
improperly minimized payouts to hundreds or
even thousands of storm victims. “These unprincipled practices may be widespread,” Brown wrote in
his Nov. 7 order.
New York’s attorney general has opened a
probe. FEMA has asked its inspector general to
investigate. Homeowners made similar claims
about doctored engineering reports after
Hurricane Katrina, when some insurers were
accused of trying to shift blame from the 2005
storm’s winds to its monster flood, which wasn’t
covered by homeowner policies.
This time, though, there is no wind-versuswater fight, and it isn’t clear why any insurance
company would have a motive to cheat. Most
were merely processing claims for FEMA; none of
their own money was at stake. The government
pays insurers marginally more to approve a claim
than to deny one.
“There is simply no incentive ... to try to guide
the engineer to an opinion, or to try to find no
coverage,” said Henry Neal Conolly, president
of Wright Flood, the nation’s largest flood insurance company. He wrote in an email to The
Associated Press that he was “not sure at all what
the alleged conspiracy is or could be not to pay
claims.”
Lawyers for flood victims have suggested that
fighting claims is so deeply ingrained in the insurance industry’s DNA that it is applying the same
bare-knuckle tactics to the National Flood
Insurance Program out of force of habit. Others
say the industry knows the program is under
financial strain and is trying to help preserve it so
they can continue to collect fees for selling and
serving policies.
Penalties
Insurers can also be penalized by FEMA if they
pay a claim later determined to be invalid, though
in recent years those sanctions have been rare and
light. From 2011 to 2014, FEMA imposed just
$742,000 in penalties on flood insurance contractors that were found to have overpaid claims,
according to agency figures. That’s a trifling
amount compared to the $8.1 billion in flood
insurance payouts made to 132,000 Sandy victims.
To homeowners who feel shortchanged,
motive doesn’t matter. “I can’t say why it’s happening, but it’s definitely happening,” said Chris
Gerold, an attorney representing some of the
roughly 1,500 homeowners in New York and New
Jersey who are suing over what they say are
improperly denied flood insurance payments.
The scrutiny of engineering firms began after a
New York couple, Deborah Ramey and Robert
Kaible, raised questions about damage reports
prepared on a badly flooded investment property
they owned in Long Beach.
The engineer who visited the house in
December 2012 initially concluded that it suffered
a partial foundation collapse in the flood. But
those findings were rejected by a supervisor at his
engineering firm, Louisiana-based US Forensic.
The manager then rewrote the report with a
reverse conclusion, that the home’s sloping floors
and tilted walls were the result of long-term settling, not flooding. As a result, the bulk of the
insurance claim was denied.
The family complained so loudly that their
insurer, Wright Flood, asked US Forensic to do a
second inspection. When the engineer returned,
he was carrying his first draft of the report, which
the family read and photographed.
US Forensic stood by its work, saying the report
was changed because the original draft contained
gross errors and unsupported assumptions. But
after conducting hearings, Brown ruled Nov. 7
that the revisions, made by an engineer who
hadn’t actually visited the property, were “baseless.” The judge also said some details within the
report appeared to have been invented to cover
up shortcomings of the initial inspection. He
accused US Forensic of engaging in “reprehensible
gamesmanship” and ordered all insurance companies in Sandy-related litigation in New York to disclose any similar draft reports.
Since then, a Texas lawyer, Steve Mostyn, has
filed additional lawsuits accusing another engineering firm of misconduct. The suits said a manager at HiRise Engineering, of Uniondale, New
York, completely rewrote two reports submitted
by a freelancing Brooklyn engineer, Harold
Weinberg, then affixed his signature without his
consent. In one of those reports, Weinberg had
written that “the entire cellar, including the slab
and the foundation walls” of a Brooklyn home
“were damaged extensively” by the flood. That was
replaced by a conclusion that “there were no structural damages observed that were caused by
flooding.” The final report blamed cracks in the
house on regular building settlement over many
years.
Underpayments
HiRise did not respond to a request for comment. Lawyers for most of the suing homeowners
said they have been getting additional documents
over the past few weeks and are reviewing them,
but have yet to receive the bulk of the paperwork.
At the urging of members of Congress, FEMA
Administrator Craig Fugate wrote to insurance
contractors Dec. 5 saying he was “deeply concerned” about allegations of underpayments and
“disreputable engineering practices.”
“We must do better,” he wrote. Fugate also
expressed concern about criticism that insurance
company lawyers might be on track to spend
more to litigate claims than it would cost to settle
them.
On Dec. 2, a panel of magistrate judges said
some industry lawyers were unreasonably delaying settlements and unnecessarily inflating legal
costs for both sides. So far, FEMA has spent $12.4
million on litigation related to Sandy flood insurance.
After Sandy, engineering firms working for the
insurance industry relied heavily on independent
subcontractors with varying levels of experience
to investigate damage.
The job included a close examination to look
for signs that the damage was there before the
flood. In dozens of reports reviewed by the AP,
engineers wrote that they ruled out flood damage
after noticing previous repair attempts, like shims
placed beneath sagging support beams or layers
of patching material built up over a crack.
Engineering experts told the AP that it isn’t
always easy to say for sure what caused damage.
Nevertheless, engineers were told not to hedge
their findings or express uncertainty. “It is critical
that you provide conclusive and unambiguous
opinions as to causation,” said instruction materials
that HiRise provided to at least one inspector.
“Weakly worded conclusions using words such as
‘appears,’ ‘may have,’ ‘likely,’ etc. will be rejected by
our clients.”
Several independent engineers who inspected
homes in Sandy’s aftermath told the AP they were
occasionally challenged by supervisors who felt
findings were unsupported by the evidence or
could have been worded differently. But those
engineers said they only changed their reports if
they agreed with the suggested alterations. —AP
EXCHANGE RATES
Al-Muzaini Exchange Co.
Japanese Yen
Indian Rupees
Pakistani Rupees
Srilankan Rupees
Nepali Rupees
Singapore Dollar
Hongkong Dollar
Bangladesh Taka
Philippine Peso
Thai Baht
Irani Riyal transfer
Irani Riyal cash
Saudi Riyal
Qatari Riyal
Omani Riyal
Bahraini Dinar
UAE Dirham
ASIAN COUNTRIES
2.443
4.622
2.918
2.223
2.892
223.990
37.846
3.755
6.581
8.938
61.555
121.740
GCC COUNTRIES
78.338
80.706
763.320
780.260
80.003
ARAB COUNTRIES
Egyptian Pound - Cash
44.950
Egyptian Pound - Transfer
40.985
Yemen Riyal/for 1000
1.371
Tunisian Dinar
158.820
Jordanian Dinar
414.580
Lebanese Lira/for 1000
1.971
Syrian Lira
2.094
Morocco Dirham
33.069
EUROPEAN & AMERICAN COUNTRIES
US Dollar Transfer
293.650
Euro
360.220
Sterling Pound
458.390
Canadian dollar
255.130
Turkish lira
126.570
Swiss Franc
301.800
Australian Dollar
239.620
US Dollar Buying
292.450
20 gram
10 gram
5 gram
GOLD
238.100
121.740
61.560
UAE Exchange Centre WLL
COUNTRY
Australian Dollar
Canadian Dollar
Swiss Franc
Euro
US Dollar
Sterling Pound
Japanese Yen
Bangladesh Taka
Indian Rupee
Sri Lankan Rupee
Nepali Rupee
Pakistani Rupee
UAE Dirhams
Bahraini Dinar
Egyptian Pound
Jordanian Dinar
Omani Riyal
Qatari Riyal
Saudi Riyal
SELL DRAFT
231.71
256.71
302.93
362.08
293.55
461.65
2.49
3.761
4.636
2.220
2.893
2.918
79.77
779.11
40.93
417.10
761.26
80.83
78.19
SELL CASH
228.71
257.71
300.93
363.08
296.55
464.65
2.51
4.031
4.936
2.655
3.428
2.790
80.23
781.18
41.53
422.75
768.56
81.38
78.59
2.710
3.945
87.645
48.035
9.885
131.225
Sierra Leone
Singapore Dollar
South African Rand
Sri Lankan Rupee
Taiwan
Thai Baht
0.000065
0.218818
0.019295
0.001880
0.009160
0.008589
0.000071
0.224816
0.027795
0.002460
0.009340
0.009139
Bahrain Exchange Company
Bahraini Dinar
Egyptian Pound
Iranian Riyal
Iraqi Dinar
Jordanian Dinar
Kuwaiti Dinar
Lebanese Pound
Moroccan Dirhams
Nigerian Naira
Omani Riyal
Qatar Riyal
Saudi Riyal
Syrian Pound
Tunisian Dinar
Turkish Lira
UAE Dirhams
Yemeni Riyal
Arab
0.772055
0.039520
0.000081
0.000194
0.409898
1.000000
0.000145
0.023926
0.001192
0.756316
0.079906
0.077630
0.001740
0.154130
0.124804
0.078928
0.001325
0.780055
0.042620
0.000082
0.000254
0.417398
1.000000
0.000245
0.047928
0.001827
0.761996
0.081118
0.078330
0.001960
0.162130
0.131804
0.080077
0.001405
Syrian Pound
Nepalese Rupees
Malaysian Ringgit
Chinese Yuan Renminbi
Thai Bhat
Turkish Lira
COUNTRY
Belgian Franc
British Pound
Czech Korune
Danish Krone
Euro
Norwegian Krone
Romanian Leu
Slovakia
Swedish Krona
Swiss Franc
Turkish Lira
Dollarco Exchange Co. Ltd
Rate for Transfer
US Dollar
Canadian Dollar
Sterling Pound
Euro
Swiss Frank
Bahrain Dinar
UAE Dirhams
Qatari Riyals
Saudi Riyals
Jordanian Dinar
Egyptian Pound
Sri Lankan Rupees
Indian Rupees
Pakistani Rupees
Bangladesh Taka
Philippines Pesso
Cyprus pound
Japanese Yen
Selling Rate
291.750
260.085
456.630
366.500
303.035
775.760
79.330
80.935
77.975
411.660
40.707
2.225
4.716
2.867
3.759
6.481
715.865
3.480
Australian Dollar
New Zealand Dollar
America
Canadian Dollar
US Dollars
US Dollars Mint
Bangladesh Taka
Chinese Yuan
Hong Kong Dollar
Indian Rupee
Indonesian Rupiah
Japanese Yen
Kenyan Shilling
Korean Won
Malaysian Ringgit
Nepalese Rupee
Pakistan Rupee
Philippine Peso
SELL CASH
Europe
0.007640
0.450768
0.004921
0.044110
0.352802
0.035456
0.084186
0.008593
0.033606
0.291108
0.124804
SELLDRAFT
0.008644
0.459768
0.016921
0.049110
0.360802
0.040656
0.084186
0.018593
0.038608
0.301308
0.131804
Australasia
0.230339
0.222091
0.241839
0.231591
0.247414
0.289400
0.289900
0.255914
0.294100
0.294100
Asia
0.003438
0.046110
0.035758
0.004399
0.000019
0.002358
0.003284
0.000257
0.080747
0.003000
0.002749
0.006483
0.004038
0.049610
0.038508
0.004800
0.000025
0.002538
0.003284
0.000272
0.086747
0.003170
0.003029
0.006763
Al Mulla Exchange
Currency
US Dollar
Euro
Pound Sterlng
Canadian Dollar
Indian Rupee
Egyptian Pound
Sri Lankan Rupee
Bangladesh Taka
Philippines Peso
Pakistan Rupee
Bahraini Dinar
UAE Dirham
Saudi Riyal
*Rates are subject to change
Transfer Rate (Per 1000)
293.000
360.650
459.800
254.850
4.615
40.965
2.220
3.740
6.555
2.914
780.250
79.850
78.300