Feature Story By MElODy S. MOSlEy
thetiming, the coverage, and the right attorney
It was a New Year’s Eve weekend that many residents of Los Angeles, Calif. and West Hollywood will not likely forget. Over the course of three days, a single suspect was tied to as many as 50 car fires, causing an estimated $2 million in damages.
This case is an example of the staggering toll arson takes on both people and property.
As claims professionals well know, arson is a serious crime. The recent fires in Southern
California serve to illustrate that blazes can often spread to surrounding homes or commercial properties, producing devastating results.
niques, including examinations under
oath (EUOs), which play a key role by obtaining information that will lead to more
informed coverage decisions.
Before we proceed with the fundamentals of claims investigation when arson is suspected, let’s review a snapshot
Intent To Defraud
According to the U.S. Fire Administration, in 2010 (the most re-
cent year for which final data is published), 16,200 residential fires
were intentionally set, killing 260 people and injuring 750 others.
These fires caused nearly $500 million in damages. [2011, U.S. Fire
In addition, approximately 8,500 non-residential arson cases
caused nearly $370 million in damages that same year. Moreover,
according to a study by the Insurance Research Council (IRC), 14
percent of arson suspects evidently seem to be motivated by a desire
to defraud an insurance company. [2009, U.S. Fire Administration]
Obviously insurers have an interest in preventing and detecting arson fires that cause
loss of life and property, as well as increase costs for us all. When examining a case
of suspected arson, investigators must assess all pertinent information and evidence in
order to pinpoint the fire’s origin and cause, as well as the circumstances surrounding
the claim filed with the insurer. Claims professionals use a variety of tools and tech-
The insured’s financial condition
prior to the loss should be
explored in great detail to
establish whether the insured
may have had a motive to cause
the fire and fraudulently overstate
or completely falsify a claim.
F Melody S. Mosley
of the impact on the P&C industry, as
well as the public’s safety and health:
EArson is the second leading cause of
fire losses in non-residential commercial
buildings. It is the fourth largest cause