SABT 5 H ARSON AND THE INSURANCE INDUSTRY

Question 0

2 List the common red flags that indicate the occurrence of insurance fraud in fire loss claims.

Answer 0

1 Risk
2 Removal of personal property
3 Prior small loss
4 Loss occurs right bf coverage ceased ( cancellation, non renewal, failure to pay)
5 Payments made to stop coverage lapse
6 fire occurs when coverage is provided by a binder
7 Coverage limits increase within 6 months of the fire
8 Call or visit the insurance agent prior to the fire, double cking coverage amounts or that the policy is in effect
9 Application taken by and insurance agent not in close proximity to the risk
10 Prior fires, cant be done by ISO claim search database, ATF forensic auditors or division intelligence groups can run these searches.
11 late reporting

Question 1

1 ID the insurance personnel and the common terminology used with the insurance industry pertaining to the processing and the investigation of a fire loss.

Answer 1

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Question 2

3 ID the legal considerations of the insurance industry in denying or paying a claim.

Answer 2

• The insurance company can deny claim if
• insured intentionally misrepresents or conceals material facts
• loss is caused thru an act committed by or at the direction of the insured
• insured does not cooperate with the investigation
• if denied, the insured becomes uninsurable
• insured becomes economically devastated
• mortage holder will receive payment

Question 3

4 Explain the purpose and the use of an arson immunity letter in obtaining the proper documentation from the insurance company to prove the violations of Federal fraud statutes.

Answer 3

-is issued to the company or attorney representing the insurance company, so that the company can legally provide info
2 show examples of arson immunity letter
3 Flow of information is a one way street. Insurance gives to ATF
-typically grand jury investigations Rule 6e
-Insurance cannot act as a agent for the GOV 5th amend issures
- can be subject to civil penalties for providing info to inurance company
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Question 4

what is insured ie. the building, the contents, business interruption

Answer 4

Risk

Question 5

document to apply for insurance; may be completed by agent

Answer 5

Application

Question 6

Temporary insurance, until policy is issured

Answer 6

Binder

Question 7

insurance company analysis of risk and determine of premium. Will contain application, policy and background

Answer 7

Underwriting file

Question 8

the insuring document. A contract between between insured and company.

Answer 8

Policy

Question 9

-Change in policy

Answer 9

-Endorsement

Question 10

-Summary of insured, coverage amounts, endorsements, loss payee, additionally injured, and mortgages

Answer 10

-Declaration Sheet (dec sheet)

Question 11

-Person or persons name on the declaration sheet

Answer 11

-Insured or named insured

Question 12

-someone other than the insured who will receive money directly from payment of the claim

Answer 12

-Loss payee

Question 13

-Document completed by agent when notified of loss usually by insured and how the agent notifies that insurance company of loss

Answer 13

-Notice of loss (ACORD)

Question 14

-Document that is the formal claim of the insured. Must be written, sworn to and on company form.

Answer 14

-Proof of Loss

Question 15

-formal examination (Q&A) of insured by insurance company pursuant to the contract policy

Answer 15

-Examination under oath (EUO)

Question 16

-advance payments made to insured bf claim is paid or denied

Answer 16

-Additional living expense (ALE)

Question 17

-Purchase price of product less the depreciation

Answer 17

-Actual Cash Value

Question 18

-Value of replacing product. Technically, must replace to be paid.

Answer 18

-Replacement Cost

Question 19

-Compensates the insured for monies lost while business is closed down due to the loss

Answer 19

-Business interruption

Question 20

insurance company employee who determine premiums and whether the insurance company will insure the risk

Answer 20

Underwriter

Question 21

Who determines the amount of loss. May or may not be a employee of the company. generally Speaking, if you run into an insurance company general adjuster you are dealing with the best of the best.

Answer 21

Claim Adjuster

Question 22

Person hired by the insurance to determine the amount of the loss. Works on percentage of claim paid.

Answer 22

Public Adjuster

Question 23

may be insurance company employee (Special Inv unit SIU) or independent.

Answer 23

Insurance Company Investigator

Question 24

may be an insurance company employee. Usually hired by the insurance company. Some good, some not. Your CFI will know who is good and can be trusted

Answer 24

Private origin and cause investigator

Question 25

individuals such as forensic accountants, electrical engineers, chemist and mechanical / structure engineers

Answer 25

Other independent experts

Question 26

Local to the community, the individual takes and submits the application of insurance to the insurance company. He could be an exclusive company representative ie. State Farm insurance agent, or an independent agent that will canvass several companies looking for the best price

Answer 26

Insurance Agent

Question 27

The insurance company is unilateral

Answer 27

that only the insurer makes legally enforceable promises in the contract.

Question 28

_____ States have Arson Immunity law (allow the insurance company to legally provide information

Answer 28

50 states, if not complying issue a subpoena