of residential fires. According to insurance industry experts and national fire-incident data, one in every 10 fires in the
United States today is intentionally set.
[2011, U.S. Fire Administration]
E The average dollar loss for all types of
arson was $17,289. Arson damages average $32,364 and $7,890 for motor vehicles. Arsons of industrial and manufacturing structures resulted in the highest
average dollar losses—$114,699 per arson. [2009. U.S. Fire Administration]
E Offenders are hard to apprehend and
convict. According to recent Federal Bureau of Investigation (FBI) statistics, only
18 percent of arson offenses were cleared
by arrest or exceptional means; 47 percent of arrestees were under the age of 18;
and 3 percent of arrestees were under the
age of 10. [2010, NFPA]
People intentionally start fires for any
number of reasons, including financial
difficulties, anger/revenge, or mental illness. The issue of fraud comes into play
when property owners deliberately destroy or damage their home, business, or
automobile by fire for the purpose of collecting from their insurance companies.
Arson fraud is typically committed by
individuals (mostly male) facing financial hardship such as foreclosure, divorce,
or bankruptcy. In some instances, homeowners use arson as a creative way to remodel or rebuild their home.
Business owners also commit arson
fraud for similar reasons. However, business owners are often more savvy than
individuals when it comes to arson fraud,
and the monetary impact is generally
greater (fraudulent inventory claims for
items that didn’t exist or were removed
from the building before the fire was set.)
EUO Success in Claims Investigations
Insurers and law enforcement officials alike realize that arson is serious business. In the battle
against fraud, claims professionals can arm themselves with vital investigative tools, including
examinations under oath (EUOs), to gather pertinent facts and make informed claims decisions.
Here, Mosley shares 10 tips to maximize the usefulness of EUOs in your investigations:
1 Provide your attorney with transcripts of all recorded statements.
2 Give your attorney copies of all expert reports.
3 Furnish your attorney with a copy of the insurance policy.
4 When dealing with an arson fire, be sure to obtain the fire department’s report about the
5 Ask if the fire department took photographs of the scene. If so, then arrange for copies
to place in your file and provide a set to your attorney.
6 Spend the necessary time to determine what documents you need and attempt to obtain
them before the EUO, if at all possible.
Meet with your attorney before the EuO to discuss the facts of the claim and ensure that
he or she has all pertinent information. A meeting allows to you to expand upon what
has been included in the claims file.
8 Maintain regular phone contact to ensure that your attorney is up to date on the
9 If possible, attend the EuO so you can judge the insured’s demeanor for yourself.
Consider asking your attorney to videotape the EuO. A videotape of the insured’s
statement taken shortly after the loss will help capture the person’s true emotions and
can be used to discount a change in behavior at a later date or during the trial.
Typically this will involve hiring an at- torney to conduct the EUO—one of the most important parts of an insurance in- vestigation—to obtain information from the insured and ad- dress specific questions and concerns about a claim. The named insured (or oth- ers as dictated by the policy) is re- quired to submit o an exami- nation under oath upon
If arson fraud is
als conduct thor-
which are separate from
the fire department. They look at a variety
of factors, including origin and cause of
the fire, coverage and subrogation issues,
witness interviews, and possible motives.
request pursuant to the loss conditions of
the policy under which the claim is being
So what is covered?
The EUO is a statement under
oath (a court reporter is present to
record the statement). It provides a viable opportunity to gather information