waterthenewarson final · water damage claims, allow for confirmation on the facts of loss. review...

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Moderated by:Scott PowellVice President of Educational and Technical ServicesProperty & Liability Resource Bureau

Water, the New Arson!

Produced by: Teresa Arnold, Martha Fitt, & Ransella WagnerProperty & Liability Resource Bureau

Water, the New Arson!

Presented by:

Travis PhiferSr. Claims Strategy Director of PropertyAmeriprise Auto and Home Insurance

Lenny TowleNational Account Director

FRSTeam

1. Each program will last 60‐75 minutes

2. Download the handout from the

“Handouts” pane in your Control Panel

3. Use the “Questions” pane to provide

Ground Rules

comments or ask questions

4. All recorded webinars can be found on our

website (http://www.plrb.org), under

“Education” “Webinars”

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THE NEW ARSON!

Water

THE NEW ARSON!

2016 PLRB Webinar Series

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Travis Phifer – Sr. Strategy Director ‐ PropertyAIC, AINS, Six Sigma Black Belt

9 years experience as a Large9 years experience as a Large Loss Fire Specialist

16 years claims handling and management experience

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Lenny Towle – National Accounts Director 14 years experience with property restoration for FRSTeam

12 year high‐tech industry with Oracle

Skills include leveraging technology for process improvement

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Welcome

Introduction of Facilitators

Key Issues to be Addressed: Investigative approaches to adjust and handle large water losses that will assist in the determination of

Program Outline

ate osses t at ass st t e dete at o opotential fraud;

Elements of the handling process for large water claims that leverage vendor partners to assist in the investigation (when applicable);

Special investigative and expert techniques utilized to uncover the fraudulent activities.

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Introduction of Water, the New Arson

WHY stage a water claim?

Common types of fraudulent water losses

Damages from fraudulent water losses Structure damages

Program Outline, Continued

Structure damages

Content damages

Staged water claims – HOW EASY? Video demonstration of staged water claims

Closing comments/questions?

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What percentage of water claims are reported as fraudulent to NICB by carriers?A 1%

Polling Question #1

A. 1%

B. 8%

C. 13%

D. 22%

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Arson is defined by the Merriam Webster Dictionary as: “The illegal burning of a building or other property; the crime of setting fire to something.”“Arson.”Merriam‐Webster.com. Merriam‐Webster, n.d. Web. 30 Aug. 2016.

Large Water Claims – The New Arson

Can a water claim be intentional? Can a water loss be classified loosely as arson, meaning the illegal flooding/water damages to a building or other property? Is there a crime related to this intentional act?

Photo property of Ameriprise Insurance

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Property/casualty insurance fraud amounts to about $32 billion a year, according to industry estimates.

The American Insurance Association reported that the growth of

The Water Arson Equation

water leaks and water damages as components of homeowners insurance claims is faster than any other component of home insurance claims.

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The Water Arson Equation

WATER ARSON – The intentional creation of water damages to homes.

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WHY???Why stage a water loss versus a fire loss?

• Harder to detect• Industry and law enforcement

focus on fire arson and fire

Large Water Claims – The New Arson

focus on fire arson and fire arson detection.

• Safer than fire (NO threat to residents, surrounding properties, or first responders)

• Lesser criminal penalties (Arson vs. Insurance Fraud)

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False/Exaggerated damage claims

Mold growth/Mold remediation

Types of Fraudulent Water Claims

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Photos property of Ameriprise Insurance

False/Exaggerated damage claims

Inflated repair charges


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Misrepresentation of long‐term conditions

Plumbing failure?


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Plumbing failure?


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Intentional damage

Lack of heat leading to pipe freezing


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Intentional damage

Loosening/Detachment/Forcible removal of pipe fittings


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Intentional damage

Disabling sump pump

Intentional clogging of pipes/Plumbing overflows


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What happened in this picture? Explain.

Open‐Ended Question #1

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Photo property of FRSTeam

Please enter your responses in the “Questions” pane.

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A staged water loss is a great way to remodel/replace an insured’s property: Basic damages – Floors, walls cabinets

Typical Damages Found in Staged Water Losses

walls, cabinets Complex damages –Electrical, plumbing, HVAC

Extreme damages – Mold, the entire home

Contents – New is better!

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Photos property of FRSTeam

Explain what happened in this picture?Step 1: In an insulated section of piping, use aerosol freeze spray to create ice in pipe.

Step 2: Wait; the section behind the frozen portion will burst due to the ice buildup in the line.

Step 3: File your frozen pipe claim.

Take a Closer Look

20Photos property of FRSTeam

The 4 Critical Components to a Good Investigation:

1. The Claims Adjuster Investigation

2. The Engineer

Investigating the Fraudulent Water Claim

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3. The Special Investigation Unit

4. The Vendor Partners

An investigation is only as good as your partners!

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The Claims Adjuster Investigation The typical adjuster will analyze the water loss and determine cause, but do they dive deep enough?

The adjuster workflow should consider fraud and include:

Detailed assessment of the damages.

Interview with the insured Ask the right questions


Interview with the insured – Ask the right questions.

Content Damage assessment.

It is an adjusters job to

CONSIDER POSSIBLE FRAUD!

Review of Handout

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The Engineer Investigation

Obtain background information on claim

from adjuster

Interview insured

Review weather history data


Review weather history data

(if applicable)

Interview neighboring property

owners

Conduct scene investigation

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The SIU Investigation SIU Evaluation of the loss – Does it make sense? Recorded statements – valuable investigative tools on water damage claims, allow for confirmation on the facts of loss. Review of Water Damage Recorded Statement Guide


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Background checks – What are you looking for?

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Image Source: Shadel, Doug. “10 Ways to Protect Yourself From Identity Theft.” (2014) www.aarp.org. AARP The Magazine. Web. 30 Aug. 2016.

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Key Indicators

Facts of loss do not match damages

Weather does not support loss

Physical signs of tampering to plumbing/water

Plumbing repairs done/parts discarded


Plumbing repairs done/parts discarded

Repairs done prior to inspection

Policy is new or changes to policy prior to the loss

Prior loss history, especially with water claims

Motive

Anxious for settlement

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Key vendor partners and what they bring to the investigation Detailed assessment of damages Detailed review of items – real or fake True determination of salvageable versus non‐

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salvageable Cash‐outs of lesser‐valued items

The following is a display of claims with actual contents and the positive results produced, including denials of fraud.

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Is the claimed item below real or fake?A. REAL – Valued at $1,200

B. REAL – Valued at $2,100

C. FAKE – Valued at $250

D FAKE – Valued at $400

Polling Question #2

D. FAKE Valued at $400

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Is the claimed item below real or fake? What are some of the qualities/attributes of this item that you observed in making your decision?

Open‐Ended Question #2

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Please enter your responses in the “Questions” pane.

Business Property vs. Personal Property

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Photos property of FRSTeam

Take a Closer Look


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Sewage Loss and High‐End Items


What is the valuation of 22 alpaca rugs? And, what is the cost to restore?

A. Valued at $12,000; restoration cost $729B. Valued at $20,000; restoration cost $2,852C. Valued at $7,000; restoration cost $1,872D. Valued at $29,000; restoration cost $5,250

Polling Question #3

D. Valued at $29,000; restoration cost $5,250

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Image Source: Voulgaris, Debra. “Alternative Therapies in Camelids.” (2011) trace.tennessee.edu. Faculty Publications and Other Works – Large Animal Clinical Sciences. Web. 30 Aug. 2016.


If you have comments or questions, please use the QUESTIONS Feature

and submit those now.

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Staging a water loss is much easier than you might expect.

The following demonstrations are simple ways to create water damage claims.

Water Arson – How Easy???

FROZEN PIPES

PIPE SEPARATIONS – Video: ‘How to Desolder Pipes.’

https://youtu.be/SR_6B1Cul0o

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Don’t simply say “It’s a basic water claim,” and move to settle!

Do your diligence in performing a full investigation. Bring in key partners SIU Investigators to review the facts of the loss

Keys to Battling Water Arson

SIU Investigators to review the facts of the loss Engineers to determine the cause of loss Vendors to review estimates, mitigation, contents, etc.

If the loss is suspicious, then investigate. Claim file handling is only as good as the investigation put forth!

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THANK YOU FOR ATTENDING!!

Download the following handouts after this presentation: 'Investigating the Water Claim: Claims Adjuster Help Guide' and

'REAL VS. FAKE ‐ How to Determine the Difference.'

If you need additional information or have additional questions feel free to contact theadditional questions, feel free to contact the

presenters:

Travis Phifer – [email protected] Towle – [email protected]

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waterthenewarson final · water damage claims, allow for confirmation on the facts of loss. review...

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