RED FLAGS

In fire insurance, red flags can occur at every stage of the insurance process. A red flag can rarely be used as justification to deny a claim or as evidence in a court of law. They are nevertheless useful as they enable insurance companies to concentrate resources on claims where there is a higher probability of there being fraud.

This page of our website is devoted to photographic examples of scenes that an adjuster or claims manager thought were odd, prompting them (likely with other red flags) to appoint a fire investigator.

This is a reasonably innocent scene in Malaysia. It is obviously an intended retail area that has not been a success. There are no advertising signs, line of parked cars, people. A rare sight in Asia. Yet there has been a fire in the corner lot, as evidenced by the deposited soot. This combination was a red flag to the adjuster the moment he arrived and subsequent forensic investigation revealed the fire was deliberate.

This scene was some hours drive from Manila, in the country. There was an unpresupposing concrete block building. No guard or other security. The red flag was the incongruity of the remoteness, no guard, but a high insured value of contents in the warehouse. The subsequent investigation revealed gross misrepresentation of the value of the stock within.

This scene was some hours drive from Manila, in the country. There was an unpresupposing concrete block building. No guard or other security. The red flag was the incongruity of the remoteness, no guard, but a high insured value of contents in the warehouse. The subsequent investigation revealed gross misrepresentation of the value of the stock within.

Similar to the example above, but on a different scale. A heap of ‘something’ laid on a concrete floor. The indoor unit of an air-conditioner above. It is on the face of it a simple case of accidental fire, with ignition beginning at the air-conditioner. Hardly worth investigating, until you become aware that the something is a very expensive medicinal fungus that can only be found in the mountains of Nepal and the insured value was US$3,000,000. Forensic investigation revealed the herb was fake.

A simple greeting card, at a discounted price. A burnt warehouse with thousands of such cards is not inherently suspicious. But put the warehouse in Manila, at the time when you could first begin to send text messages by telephone. At this time Manila had emerged as the text-messaging capital of the world. Imagine the effect of this on the greeting card industry. An astute adjuster drew a deduction and a forensic investigation revealed the fire was deliberate.

A simple greeting card, at a discounted price. A burnt warehouse with thousands of such cards is not inherently suspicious. But put the warehouse in Manila, at the time when you could first begin to send text messages by telephone. At this time Manila had emerged as the text-messaging capital of the world. Imagine the effect of this on the greeting card industry. An astute adjuster drew a deduction and a forensic investigation revealed the fire was deliberate.

The view from the guardhouse of this modern factory, making extruded engineering parts for the electronics industry. There had been a fire within, destroying machines and stock. The initial red flag was that the owner had arranged for the guard to go back to his home town for the weekend, and had ‘forgotten’ to arrange a replacement. A forensic investigation revealed the fire claim to be fraudulent.