A Hartford Financial Services Group Inc. insurance unit denied a Hurricane Sandy damage claim based on an engineering report that was altered without approval, a lawyer for policyholders told a New York judge as allegations mount that insurers are wrongfully dodging payouts.

New evidence of a damage assessment being altered by a third party without approval by the original inspector contradicts insurers’ statements that the practice was isolated to a single case, according to a letter sent Monday to a federal magistrate judge in Central Islip, N.Y.

The judge, Gary R. Brown, earlier found that another insurer, Wright National Flood Insurance Co., had used a potentially fraudulent report and expressed concern the practice may have been “widespread.”

Sandy, the largest Atlantic storm in history, caused about $60 billion in damage in New Jersey, New York and Connecticut when it struck in October 2012. It killed more than 100 people in the U.S. and triggered the worst flooding in the more than 100-year history of the New York City subway system.

In Monday’s letter, attorney Steve Mostyn described the experience of Stephen and Sarise Dweck after their home in the Manhattan Beach area of Brooklyn, N.Y., was devastated by the storm.

An engineer on Jan. 11, 2013, found the storm surge filled the home’s cellar and “washed out” the interior of their first floor, according to the letter.

Altered Report

The family’s claim with Hartford Insurance Co. of the Midwest was denied based on a version of the report that was altered by HiRise Engineering PC to remove the description of widespread flooding damage, according to the letter. The couple complained about the discrepancy.

“Instead of addressing the altered engineering report, Hartford suggested –- nearly one year after the storm -– that a new engineer be selected to produce yet another report,” Mostyn said in the letter. There is “mounting evidence that altered engineering reports are not isolated.”

Hartford Financial isn’t named in the lawsuit in which the letter was filed. The description of the Dwecks’ experience was used to back the lawyer’s claim that the alleged practice by Wright National is widespread.

Tom Hambrick, a spokesman for Hartford Financial, declined to comment on Mostyn’s letter when reached by phone. There was no immediate response to a message left at HiRise’s offices.

Homeowner Suits

Wright National and U.S. Forensic LLC, an engineering firm, were sued last month by New York homeowners who claim the companies conspired to manipulate reports and avoid paying for damages from Hurricane Sandy.

Wright, which provides coverage on behalf of the government’s National Flood Insurance Program, “systematically sought to underpay legitimate claims” through the use of “fraudulent engineering and claims handling analysis” by U.S. Forensic and other firms, policyholders alleged in a complaint filed Nov. 21 in Central Islip federal court.

Owners of a storm-battered home in Long Beach, N.Y., said the insurer rejected their claim using a baseless engineering report. They are seeking to represent potentially hundreds of other policyholders whose claims are alleged to be either denied or underpaid based on similarly conducted reports.

By denying or underpaying claims, Wright mitigated its risk of facing a government audit and financial penalties for overpayment, according to the complaint.

Brown found last month that an engineering report for the same Long Beach house was potentially fraudulent, having been rewritten to say the problems were due to long-term deterioration after inspectors initially found it was damaged beyond repair by the storm.

The cases are Raimey v. Wright National Flood Insurance Co., 2:14-cv-00461, and Raimey v. U.S. Forensic LLC, 2:14- cv-06861, U.S. District Court, Eastern District of New York (Central Islip).