Insurance - fraud or friend??

I recently saw a report on 60-minutes revealing fraud by flood insurance companies. Some flood insurance companies changed reports their engineers wrote after inspecting homes during the aftermath of Hurricane Sandy, then tried to force the engineers to sign affidavits saying they agreed with the insurance companies’ final reports.  Engineers reported that the homes were structurally damaged due to Sandy and flooding, but homeowners received responses from the insurance companies stating there was no structural damage to their homes.  Several homeowners contacted the engineers who inspected their homes and learned the reports the engineers submitted were different than the ones the homeowners received from their insurance companies. Here is the link to the article if you want to read the full text.  

To make matters worse, some of the homeowners who filed lawsuits against the flood insurance companies have been attacked in court and accused of fraud by attorneys supported by FEMA.  Homes in flood plains are required to have flood insurance and most of these policies backed by FEMA (paid with taxpayer dollars). The new head of FEMA was interviewed in the segment (he’d been on the job 3 weeks at time) and he said he’d seen some of the fraudulent reports and complaints from homeowners.  He didn’t understand why the issue hadn’t been escalated and is taking accountability for those lawyers who are acting in unprofessional manner.

So the question I have is this:  is Insurance Fraud or Friend??  It has become a requirement to have insurance as protection against many challenges, from medical issues to someone slipping on your sidewalk to errors and omissions made in oral conversation with a client.  Without insurance individuals and businesses could be on the hook for huge and unsupportable claims.  However, the tides are turning and now receiving settlements from insurance companies is getting harder and harder to achieve, sometimes possible only after filing lawsuits and paying attorneys large fees to force settlements.  I only know of a rare few occasions where insurance companies actually paid their customers according to the terms of the policies.