Arson Fraud questions and answers
What is Arson fraud?
Arson fraud is insurance fraud is committed by property owners who deliberately destroy or damage their property by fire for the purpose of collecting from their insurance companies. The motive for this act is profit and it is usually committed by individuals who find themselves in difficult financial positions, such as high debt, possible foreclosure or bankruptcy.
The typical arson fraud involves an individual or a conspirator setting fire to their home, business or automobile. The intent is to collect insurance money to pay off a loan or mortgage balance which may be in excess of the value of the property.
Business owners also commit arson fraud for the same reasons as individuals. However, business owners are often more savvy than individuals when it comes to arson fraud and the monetary impact is greater. They sometimes hire professional arsonists to perform the act. In addition, they are more adept at perpetrating more elaborate schemes such as claiming damage to inventory that didn’t exist or was removed from the building before the fire was set.
Who commits Arson?
The following list provides some answers to who commits arson.
- Individuals may commit arson for the thrill of it. Targets are random and opportunist.
- Individuals may commit arson as a means of revenge or hate against an individual or group of individuals. Targets can be neighbors, employers and other racial/ethnic groups.
- Individuals may commit arson as a method to hide another crime. Criminals set fires to destroy evidence of their unrelated crimes.
- Individuals may commit arson as a way to profit. This commonly is referred to as arson fraud and it is committed by owners of insured property who hope to benefit financially by this act.
How is Arson detected?
Some people believe that arson is difficult to detect because the evidence is destroyed by the fire. This is not always true. There is usually forensic evidence remaining that can be used by a professionally trained fire investigator to establish that arson has been committed. The residue from flammable materials can be detected scientifically or by use of trained animals. Evidence as to how the fire progressed provides other clues as to its cause and origin.
Why is Arson fraud a serious crime?
Arson is a serious crime because it may result in personal injury and death as well as economic loss.
- Arson fraud results in the deaths of innocent victims and firefighters killed as a direct result of the arson fire.
- Arson fraud impacts other individuals and businesses whose property was destroyed or affected by the arson fire.
Additionally, arson fraud has the effect of raising insurance rates for all property owners within the community.
What does Arson cost?
The United States Fire Administration reported the following arson statistics for Connecticut during 1997 the most recent year available:
- Arson was the cause of 2,448 fires reported.
- Arson accounted for over 17% of all fires reported.
- Arson caused over $11 million in property damage.
- Arson caused five civilian deaths
What is being done to combat Arson fraud?
- Federal and state law enforcement agencies have established task forces to investigate and prosecute arson cases.
- Insurance companies have created special investigative units (SIUs) to investigate claims that may involve arson.
- The Insurance Department has undertaken action to alert insurance consumers of fraud problems.
Who should you contact if you believe Arson has been committed?
- Report all cases of suspected arson to the Fire Marshall in your local town or city fire department; and
- Report all suspected arson cases involving insurance fraud to the Connecticut Insurance Department at:
Connecticut Insurance Department
PO Box 816
Hartford CT 06142-0816