Watch the full video at https://rumble.com/v2oi21i-how-not-to-commit-arson.html and at https://youtu.be/xXCaz2ZbuDU
This is a fictional insurance fraud story from an expert who explains why insurance fraud is a “Heads I Win, Tails You Lose” situation for insurance companies.
It takes skill to use arson to fool an insurer
Most people do not understand how difficult it is to set fire to a house that will destroy the entire residence and its contents. Most homes simply do not have enough combustible material in the right place to allow for a sustained fire. Many homes, especially the more modern ones, have fail-safe devices everywhere that make accidental fires a thing of the past.
An insured decided that the only possible way to escape his mortgage was to burn down his house. Being quite the imaginative fellow, he decided to make the fire look like an accident as well.
When he left his house in the afternoon, he opened the gas jets on the stove, blew out the pilot on his gas dryer and water heater, and set the thermostat on his electronically lit oven to 80 degrees Fahrenheit. It was a hot summer day, but he assumed it would eventually cool down a bit, the thermostat would turn on the furnace, and the electronic starter motor would cause a gas explosion that would destroy the entire house. What he didn’t count on was Southern California’s Santa Ana Winds bringing heat from the desert and keeping the outdoor temperature in the hundreds throughout the day and into the night. The insured was shocked that a curious neighbor with clear sinuses could smell the gas, turn it off at the meter and save the house.
When the insured returned home, he naturally had to hide his disappointment that the house was still there. Undaunted, however, he tried again the next week. This time he was taking no chances. He went to the hardware store and bought a box of Coleman cooking fuel and spread it throughout the house. Then he tore open a book of paper matches so that there was no cover, only matches. He lit a cigarette and placed it low between the matches and left the house convinced that when the cigarette burned down it would ignite the match heads and burn the house down. He was again very disappointed when he returned home to find the house still standing.
The would-be arsonist had his innocent wife with him as an alibi. When they entered the house, she became hysterical at the sight of the flammable liquids being poured throughout the house. She insisted that he report the incident to the fire department. He wouldn’t do it so she, against his will, called in the arson investigators.
“Boy, you were lucky.” A young investigator of the arson unit said. “The idiot who tried to set your house on fire flipped his fuse upside down!” Immediately his partner kicked him in the shins but it was too late to stop him.
That the cigarette, to be used as a fuse, had to be placed at the top of the matches, not the base, was not known to the insured and the cigarette simply burned out.
The insured learned a lesson from the arson investigator. The house burned almost completely two days later.
The claim to the insurer included, among other things, an encyclopedia Britannica and a wooden decoy. These unimportant items, forming part of a claim for more than $100,000.00 in personal property, led to the insured’s arrest when they were found, intact and undamaged, in his temporary residence.
The insured was arrested for arson and insurance fraud. His claim was rejected.
He sued for bad faith, of course, and the insurer had to defend the suit for a total of five years because it could not compel his testimony at deposition or trial until his criminal case was resolved. In the fifth year of the bad faith lawsuit, the insured’s attorney called the insurer’s attorney and suggested that his client release and dismiss the action with prejudice for a payment of only $5,000. The adjuster in charge – although he had spent over $30,000 defending the suit, refused the settlement and instructed his attorney to offer only $2,000.
After instructions, the offending offer was made and, to the great surprise of the defense counsel, the offer was accepted. The suit was finally settled with the arsonist and his presumably innocent husband, for a payment of $2,000.00. Twenty times less than the amount the insurer spent defending the bogus lawsuit filed by the insured.
Why did the insured offer to settle for so little? For at least two reasons:
Because the district attorney couldn’t let one man go free to try the arson case and it went on and on and on until all the witnesses were gone or had forgotten everything they knew.
Because the district attorney and the insured had made an agreement that if the insured pleaded guilty to one count of insurance fraud, he would not go to jail.
The district attorney, although aware of the insurer’s interest in the case and the pending litigation against it, did not advise the insurer on the deal. Of course, if the insurer had known that the insured would plead guilty to insurance fraud, they would not have paid anything.
The case was never tried. Two days after the settlement was paid in the civil action and more than five years after the fire, the insured appeared in criminal court and pleaded guilty to one count of insurance fraud. He received probation. The case was not a priority issue for the prosecutor because only one insurance company was injured. The fact that the insurer had to defend a bad faith lawsuit for five years at enormous expense was of no apparent concern to the prosecutors.
The insured did not profit from the fire with cash compensation. He was released from his mortgage debt [which the insurer was required to pay to the mortgagee who had not been culpable in the arson] and he paid his attorney one-third of the $2,000 settlement. As the insured was judgment-proof, the insurer, as it could not be collected, forfeited the amount paid to the mortgagee and sold the bare land.
Interestingly, the arson investigator who worked so hard to find evidence to arrest the insured was later arrested and convicted as a serial killer. Apparently he was upset that there was an arson in his town that he didn’t start.
Adapted from my book
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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