Auto Arson Fraud Indicators

When a claim report for an automobile fire is made, it's important to treat the claim as legitimate to avoid offending good customers or alerting potential defrauders. But here are some fraud indicators that will help alert you to a possibly fraudulent claim:

• The loss occurred close to the start or end of the policy period, within two months of inception or a month of expiration or cancellation.
• The coverage was recently increased.
• The origin or cause of the fire is suspicious or unknown.
• The insured is unemployed.
• The loss was not reported to the police or fire department.
• The loss occurred in a remote area after 11 p.m.
• The vehicle had been advertised for sale.
• The vehicle was reported stolen, and then recovered a short distance from the insured's home.
• The insured is involved with domestic problems, litigation, or financial difficulties.
• The vehicle was rebuilt, had been recovered from a previous theft, or had been involved in a major collision.
• The vehicle is a late model but has high odometer readings.
• The vehicle was stripped before the fire.

When a possible fraud is indicated, take these steps to investigate whether the claim is honest or fraudulent:

• Relay information about the claim to the company's fraud unit.
• Check the insured for multiple claims through any available databank.
• Review the claim filed by the insured.
• Review the policy history to check the time it has been in force and any claim history. Are there large numbers of claims by the insured, or any pattern of loss type?
• Take a recorded statement of the insured's description of the loss.
• Review the police report and note who reported the fire, who was present at the scene, and any statements the insured or any witnesses may have made.
• Take a recorded statement from any witnesses.
• Inspect the vehicle for any evidence of the following:

• fuel-system component damage
• electrical-system component damage
• fragments of matches, paper, or rags
• signs of accelerants, especially gasoline, outside the gas tank
• keys in the ignition and ignition turned on
• melted window glass
• distended seat springs
• window tracks in the open position
• personal belongings in the glove box, passenger compartment, or trunk

• Review the insured's credit history, paying special attention to the actual car-loan or car-lease contract.
• Search courthouse records for liens, judgments, pending cases for property settlement, and divorce cases.
• Compare the reported cause of the fire against fire-department records.
• Compile the findings and determine the motive, opportunity, and intention.