Author's Note: The following story is based on fact. It is, however, a work of fiction. The names, places and descriptions have been changed to protect the guilty. Any resemblance to real people is purely coincidental. This story was written for the purpose of providing insurance professionals sufficient information to recognize a certain type of fraud while broadening public awareness and challenging perceptions that can interfere with fair outcomes.   

We begin with the story of an insured who has purchased, for the first time in his life, a policy of personal articles floater Insurance (PAF) scheduling $125,000 worth of ladies' jewelry. When he first acquired the insurance, he advised the insurance agent that the jewelry was always kept in a class E safe (one that requires at least 30 minutes to drill out the lock) at his residence. The insured claimed to be employed full-time as the owner of a gasoline service station. He also said he had neither suffered a previous (insured) loss, nor had a carrier ever canceled his policy.   

Well, one month after the policy was issued, and just before the first installment of the premium finance contract was due, this insured reported a loss. A rather large one. At the time, he claimed two armed robbers came to his door at midnight—while his wife and child were fortuitously away helping a neighbor fill out immigration and naturalization forms—and forced him, at gun point, to open the safe. They allegedly removed only the jewels, striking him on the head with the weapon, and tying him up like a mummy with 56 feet of rope they just happened to have the foresight to bring with them.