When underwriting for arson coverage you have to consider that about 50% of cases are associated with fraud. You have to look at the eight categories of intentionally set fires as an underwriter. These categories are fraud fires, spite fires, vandalism fires, political fires, pyromaniac fires, crime concealment fires, vanity fire, and “Psycho” fires.
The main focus for an underwriter when writing for arson is looking at arson for profit. Having said that the underwriter has to use common sense and consider that businesses may be well run and would not resort to arson for example.
In the case of arson for profit, it is not always the case that the owner starts the fire. It is easy to hire professionals or other parties to start a fire. Arson rings are sophisticated. The typical arson scenario involves a business that is in a bad financial situation. Underwriters look out for poor financial conditions, poor building maintenance, previous fire or theft losses, recent increase in coverage, absentee landlord or vacant building; building is for sale, other mortgages, high market value, and previous criminal records.
Underwriters have to identify the arson prone risk and refuse issuance if the risk is real. Underwriters have more time to assess risk when coverage is up for renewal.
Randi Glazer is a knowledgeable and experienced underwriter and senior insurance professional.
Visit https://www.youtube.com/watch?v=Aj_HN_ttJdw for more information about her.
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