"Red Flag” Fire Loss Fraud Indicators – Property Claims
by DMA Investigations

The following is a list of indicators that point to the potential of fraud in connection with a claim. This is a summary of the most common “red flags” for quick and easy reference, but should not be considered a complete list. Note: just because some of these indicators appear in a claim does not mean that any aspect of the case is fraudulent. These indicators are merely a tool to help isolate which cases might warrant further review. The greater the number or magnitude of the “red flag” indicators, the greater the likelihood that fraud may be present in that claim.

The cause of a fire is suspicious, for example, If:

1. There are multiple points of origin.
2. The fire exhibits rapid spread, intense heat, and signs of extensive destruction.
3. The fire occurs at a time of day when it is likely to go undetected for a longer period of time.
4. The sprinkler system is turned off, fire doors propped open, or fire or burglar alarms deactivated.
5. There Is an unusual presence of flammable liquids or containers from such liquids in or around the structure.
6. Premises that are normally locked and secure were unlocked at the time of the loss.
7. The fire starts in a closet or an area where there is no expected source of ignition.
8. There are signs of artificial draft or combustion aids, e.g., windows open, holes in the walls
9. There are timing devices connected to energy devices, e.g., hotplates, skillets or irons.
10. The fire loss claim does not include expected items such as personal papers, items of sentimental value, valuables not easily replaced, and the like.
11. Smoke detectors, sprinkler systems, or alarms fail to work.
12. Items are claimed, such as coins, jewelry and guns, that are not combustible, but no remains of the Items are found at the fire scene.
13. Photographs of the fire scene lack items that would normally be present at such a scene, e.g., clothes closets are mostly empty, no family photos are around, etc.
14. The property is up for sale.
15. The insured is calm and shows little concern while at the scene, or after the fire when he was told that the fire was intentionally set.
16. Only a short period of time elapsed between the insured's departure from the structure and the start of the fire.
17. The insured has an alibi that appears too convenient.
18. The insured is in possession of the insurance policy when it should have been destroyed in the fire.
19. Arrangements were made for the survival of irreplaceable items such as photographs, jewelry, silver, guns, expensive toys, family heirlooms, or tools.
20. The insured handles all business regarding the claim in person, thus avoiding the use of mail.
21. All items destroyed were allegedly top-brand merchandise.
22. The insured provides receipts with incorrect or no sales tax figures.
23. The insured provides two different receipts with the same handwriting.