Arson: How to Avoid Getting Burned

Monday, January 15th, 2001 Fraud Property

When the cause of a fire is unknown or seems suspicious, an investigation is necessary to determine a number of issues. Is a third party or entity legally responsible? Was there an accidental or providential cause? Did the insured or someone on his or her behalf set the fire intentionally? How that investigation is approached is critical. One of the most common problems is the time needed to conduct an investigation. Adjustment of the claim sometimes remains in limbo for several weeks or months until decisions are made about its ultimate disposition. Since establishing a viable arson defense can be problematic, delay may expose the company to liability for withholding payment and extra-contractual damages for bad-faith claims handling.

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http://www.namic.org/pcimagazine/archives/091000b.asp

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