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Investigation of Suspected Fraud  

See the full article at https://zalma.com/blog

Every first-party property adjuster will face in his or her career  attempts to defraud the insurer for whom the adjuster works. It is  necessary that the adjuster is aware of each type of property insurance  fraud he or she may encounter. Some, but surely not all, fraud types  follow:  Arson-for-Profit.  Arson is the intentional burning of property. It no longer is limited to  specific types of property. Although perhaps the most dangerous of all  methods of insurance fraud, people continue to attempt insurance fraud  by burning their homes, vehicles, and business structures. The FBI  advises that:  In 2010, 15,475 law enforcement agencies provided 1-12 months of arson  data and reported 56,825 arsons. 

Of the participating agencies, 14,747  provided expanded offense data regarding 48,619 arsons.  Arsons involving structures (e.g., residential, storage, public, etc.)  accounted for 45.5 percent of the total number of arson offenses. Mobile  property was involved in 26.0 percent of arsons, and other types of  property (such as crops, timber, fences, etc.) accounted for 28.5  percent of reported arsons.  The average dollar loss due to arson was $17,612. Arsons of industrial/manufacturing structures resulted in the highest  average dollar losses (an average of $133,717 per arson). Arson offenses decreased 7.6 percent in 2010 when compared with arson  data reported in 2009.... Nationwide, there were 19.6 arson offenses for every 100,000  inhabitants.  By use of technical devices, chemical analysis, and even trained dogs it  has become more difficult for the arsonist to cause a fire that appears  to a trained investigator to be accidental.  Arson is not excluded in any first party fire policy. 

It is, in fact, a  specifically covered peril: fire. There is no arson defense available to  an insurer. The defense for an arson caused by an insured to defraud an  insurer is misrepresentation, concealment, or fraud, an exclusion in  every fire policy.  There is rarely direct evidence that a fire was set by an insured.  Without an eyewitness or other direct evidence, the insurer can prove  the insured was involved in an arson-for-profit circumstantially by  presenting evidence of the insured\\u2019s motive, opportunity and ability to  cause the fire. Motive is not required to prove arson although showing a  trier of fact a motive makes it easier for the trier of fact to believe  the insured caused the fire to occur to defraud the insurer.  In Fitzgerald v. Great Central Insurance Co., 842 F.2d 157 (6th Cir.  03/18/1988) following a fire, plaintiffs\\u2019 claim for benefits was denied.  The insurers claimed that Gerald Fitzgerald set or procured the setting  of the fire. Plaintiffs then filed a complaint against Aetna and Great  Central for breach of contract.  On the night of the fire, Gerald Fitzgerald, his son and the family dog,  who lived in the apartment above the tavern, were all absent from the  building. Gerald Fitzgerald spent the night at the Coho Club in Traverse  City and left his son and dog with a friend. Michael Husby, who also  lived in Fitzgerald\\u2019s apartment and had recently bought into the  corporation, visited the bar during the evening but spent the rest of  the night at his girl-friend\\u2019s house.  Staged Theft