Nowadays, news outlets provide us with a terrifying glimpse of the immense destruction fires can cause. Most recently, the drought-ridden western swath of the U.S. has endured many a tragedy stemming from wildfires specifically.

Barely a year after the infamous Waldo Canyon fire, which claimed two lives and caused $353.6 million in insured damages, Colorado found itself battling another massive blaze—the Black Forest Fire, which has produced about 3,630 claims thus far and could ultimately cost insurers about $292.8 million.

From wildfires to plant explosions, investigating fire claims can be intimidating to even the most experienced claims adjusters or cause and origin specialists. One subset is arson, which happens when someone intentionally sets a fire, usually as part of a scheme to defraud his or her insurer.

The U.S. Fire Administration estimates that one in every 10 fires in the U.S. today is deliberate. In fact, based on data collected by the National Fire Protection Association (NFPA), at least 26,500 structure fires were intentionally set in 2011 (the most recent year for which data is available). These estimates do not take into account fires for which the cause is unknown or those that go unreported, meaning the problem could be even greater. In addition to structures, roughly 14,000 vehicles were intentionally burned, resulting in $88 million in property losses.

Compounding matters is the fact that it is difficult to prove that an insured set a fire, as opposed to someone else. Witnesses are scarce, because arsonists usually work alone. Therefore, similar to a murder trial featured on ”48 Hours Mystery” these cases are often based on circumstantial evidence, such as a strong motive, including heavy debt, loss of employment, recent or pending divorce, gambling problems, tax liens against the insured property, and pending foreclosure or bankruptcy. Other times, the motive is as simple as revenge against a spouse or greed.

Aside from enlisting the help of a qualified fire expert, how should claims adjusters proceed when they suspect foul play? As in countless scenarios, the claims file itself may provide direction and valuable clues as to the veracity of the insured's story. Below is a list of common Claims File Red Flags that might suggest arson or at least that further investigation is warranted.

The fire(s) occurred at night.
The policy was recently issued, or was an endorsement made to it?
The insured is overly pushy.
The insured is very familiar with insurance terms.
You learn the insured is behind on mortgage payments.
There is a history of claims made by insured.
Hand-delivered proof of loss.
Fires occurring close to expiration date of policy.
The property is over-insured.
The property is listed for sale (or has been for a long period).
The insured claims that many antiques or luxury items were destroyed.
The sprinkler system was recently de-activated.
The alarm system was not set at the time of the incident.
There has been a recent decline in utility use.
A lease with fire-termination clause.

Can you think of other considerations for determining the cause (and potential culpability) in fire claims? Also, be sure to Check out our list of Fire Scene Red Flags here…

Special Reports /

Accident or Arson? Top Red Flags in Fire Claims

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