Intentionally setting fire to your own home or business is considered arson. Besides the crime itself, arson can be used in furtherance of insurance fraud. Insurance fraud is big money, costing insurers billions of dollars. Although insurance companies can invoke the arson defense to deny claims in certain circumstances, it’s not always easy to prove. And attorneys for the insured party are likely to challenge the insurer for denying the claim. The insurance defense law firm of Rosenbaum & Taylor can help your company understand how the arson defense works.
When an insurance company suspects that a home, business, or other property was intentionally torched, claim denial is likely. But the insurance company has to be prepared to defend this claim in court. That’s because aggressive attorneys representing the insured may challenge this denial. In many cases, therefore, the insurer will seek a judge’s order that it does not have to pay the claim.
The burden of proof lies with the insurance company that is invoking the arson defense. And it’s not as straightforward as the insurer may want to think. The insurer has to have clear and convincing evidence on its side. It starts by providing evidence that the insured committed arson. This usually requires some indication that an accelerant was used. An accelerant is a combustible material used to either start or spread a fire, such as gasoline. The presence of an accelerant is a fairly strong indicator that the fire was not accidental.
Forensic evidence is typically uncovered by a fire or crime scene investigator. The insurance company also uses its own investigators to determine the cause and origin of the fire. After evidence is gathered, it is sent to a lab for further analysis. The problem is that accelerants can be consumed in the fire. This opens the door for the insured to argue that there is no evidence of arson.
But circumstantial evidence can also be used with forensic evidence to substantiate the insurer’s defense. Part of this analysis involves considering potential motives for starting the fire. The circumstantial evidence involves such questions as:
- What is being claimed – the property itself, items within the property (e.g. electronics), etc.?
- What is the fair market value of the destroyed property?
- What are the policy coverage limits?
- Was there a previous attempt to sell the property that failed for some reason?
- What was the financial situation of the insured at the time of the fire?
- Were there any other (non-financial) stress factors in the insured’s life at the time of the fire?
- What is the history of insurance premium payments on the property?
Oftentimes, it’s not the presence of one single piece of circumstantial evidence that supports the insurer’s argument. The evidence has to be taken in concert with other facts that could help or hurt the defense. Every arson defense case must be decided on its merits. The facts in one case, therefore, may not substantiate arson in another.
If your company has evidence of arson, it’s essential to speak with an experienced New York insurance defense attorney. No matter how convincing the evidence is, you can count on an aggressive plaintiff’s lawyer to challenge it. Your company will have to contend with allegations that the claim was denied in bad faith. If the plaintiff can successfully prove this, it could cost your company more than had it simply paid the claim. This is why retaining skilled legal representation is so important.
No Matter The Challenges Facing You, We’re Ready To Fight
Arson is just one form of insurance fraud, an increasingly sophisticated “industry” with lucrative payoffs for fraudsters. You have the right to defend your company against these claims, and we’re here to help. Regardless of what legal challenges you face, turn to the insurance defense attorneys of Rosenbaum & Taylor. We’re here to fight for you. Contact us today for a FREE case review.