Blowing Smoke

Arsonists’ handiwork has dominated headlines in the past several months. Earlier this year, in southeast Pennsylvania, an alleged group of firebugs torched dozens of buildings in one community before being caught. In rural New Hampshire, a man was charged with nine counts of arson and until he was jailed, there was scant evidence the alleged arsonist would cease burning things down. And in California and Nevada, an increasing number of vehicles have been burned as part of owner give-up plans to dispose of their cars and cash in on the insurance, according to the National Insurance Crime Bureau.

Insurance agents and their carriers need to be vigilant about insurance claims being made as a result of property being destroyed by smoke and fire. Recent NICB reports and the findings of an ISO-commissioned survey released earlier this year are proving alarming.

NICB Special Agent Mike McKee noted that in California, agents should be suspicious of consumers who report thousands of dollars in alleged smoke and ash cleanup costs following wildfires — especially when the bills come in six months after the fires occur. He also cautioned that with more consumers in economic straits, some owners are reporting their car stolen, but they actually take it out to the desert and set it on fire, then try to make a profit on it.

“As the vehicle fraud trend gains steam, it reveals much about people’s desperation to escape the economic vise as their finances crumble. This crime trend also show how easily many people will bilk their insurers whenever financial pressure reaches critical mass,” agreed James Quiggle of the Coalition Against Insurance Fraud.

Because they are on the front lines interacting with consumers, agents can help to catch and prevent fraudsters from taking advantage of the insurance industry, the costs of which are passed onto all consumers, McKee and Quiggle said. Meanwhile, agents and brokers can help consumers to protect their assets from legitimate fires, by providing them with valuable information.

The ISO survey, which relied on the input of 500 fire chiefs from communities of all sizes, found that the lack of infrastructure for delivering water can lead to critical delays in firefighting. Nearly one in six departments said it has no water service for firefighting or must rely on sources other than hydrants. The survey also pointed out that more than half of the fire chiefs surveyed “always or almost always” call on neighboring departments to respond to an initial alarm for a structure fire. One of the main reasons that fire departments are always calling on their neighbors is that they lack the number of firefighters, in many cases, to respond properly.

With firefighting resources taxed to their limits, property owners should take preventive measures to prevent fires from occurring in the first place. Many insurance companies provide free evaluations to homeowners in wildfire-prone areas to reduce their fire risks. Agents would be wise to advise customers to take advantage of such services.

After all, according ISO’s Mike Waters, “it’s not enough to know there’s a fire station nearby. You also have to know if the station will respond to a possible fire and if there will be enough trained personnel, adequate equipment and sufficient water for firefighting.”

Topics Agencies