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Sen. Robert Menendez Presses For Sandy Insurance Probe

NEWARK, N.J. (CBSNewYork/AP) -- Insurance companies might face more scrutiny over how they are handling flood damage claims from Superstorm Sandy.

Sen. Robert Menendez of New Jersey on Friday demanded that the Federal Emergency Management Administration investigate allegations that insurers are manipulating those claims to shortchange Sandy victims.

Sen. Robert Menendez Presses For Sandy Insurance Probe

He also wants FEMA to impose penalties on companies that lowball home owners, paying them less than they should.

Doug Quinn said foundation cracks popped up at his Toms River home after Sandy. He said an engineer told him the cracks came from flood damage, but his insurance told him it came from prior Earth movement and therefore wouldn't be covered by his flood insurance.

"The Earth didn't move until the storm hit it," Menendez said, adding that he's heard from hundreds of Sandy victims, like Quinn. "Their stories followed a common thread."

Menendez is calling on FEMA to increase transparency and protect policy holders.

Menendez is acting after a federal judge in New York recently found evidence that flood insurance companies have had damage assessors alter reports so they could pay less to policyholders.

He estimated that thousands of homeowners may have been impacted by the same re-adjustments.

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