SABT 5 H ARSON AND THE INSURANCE INDUSTRY Flashcards
2 List the common red flags that indicate the occurrence of insurance fraud in fire loss claims.
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
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.
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3 ID the legal considerations of the insurance industry in denying or paying a claim.
- 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
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.
-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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what is insured ie. the building, the contents, business interruption
Risk
document to apply for insurance; may be completed by agent
Application
Temporary insurance, until policy is issured
Binder
insurance company analysis of risk and determine of premium. Will contain application, policy and background
Underwriting file
the insuring document. A contract between between insured and company.
Policy
-Change in policy
-Endorsement
-Summary of insured, coverage amounts, endorsements, loss payee, additionally injured, and mortgages
-Declaration Sheet (dec sheet)
-Person or persons name on the declaration sheet
-Insured or named insured
-someone other than the insured who will receive money directly from payment of the claim
-Loss payee
-Document completed by agent when notified of loss usually by insured and how the agent notifies that insurance company of loss
-Notice of loss (ACORD)
-Document that is the formal claim of the insured. Must be written, sworn to and on company form.
-Proof of Loss
-formal examination (Q&A) of insured by insurance company pursuant to the contract policy
-Examination under oath (EUO)
-advance payments made to insured bf claim is paid or denied
-Additional living expense (ALE)
-Purchase price of product less the depreciation
-Actual Cash Value
-Value of replacing product. Technically, must replace to be paid.
-Replacement Cost
-Compensates the insured for monies lost while business is closed down due to the loss
-Business interruption
insurance company employee who determine premiums and whether the insurance company will insure the risk
Underwriter
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.
Claim Adjuster
Person hired by the insurance to determine the amount of the loss. Works on percentage of claim paid.
Public Adjuster
may be insurance company employee (Special Inv unit SIU) or independent.
Insurance Company Investigator
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
Private origin and cause investigator
individuals such as forensic accountants, electrical engineers, chemist and mechanical / structure engineers
Other independent experts
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
Insurance Agent
The insurance company is unilateral
that only the insurer makes legally enforceable promises in the contract.
_____ States have Arson Immunity law (allow the insurance company to legally provide information
50 states, if not complying issue a subpoena
