Since 1988, Tom Lether has represented national and local insurers in first-party arson claims. Utilizing examinations under oath, requests for information, forensic experts, and other investigatory tools, Lether & Associates has been involved in some of the largest commercial and residential arson cases in the Northwest – the most notorious of these being the tragic 1995 Mary Pang Food Warehouse Fire where four Seattle firefighters tragically lost their lives.
Over the past 30 years, the methodology of criminals who are involved in fraudulent insurance schemes has become more sophisticated. Insureds have developed new ways of recovering from insurers on intentionally caused losses. A growing trend involves fraudulent water damage claims. Similar to fire loss claims, water damage claims can be intentionally caused. Moreover, legitimate water damage events can lead to inflated or overstated claims. The similarities with arson cases are striking. However, the tactics in regard to investigating these claims are not nearly as developed. For example, in arson losses there are dozens of experts who are available to testify as to cause and origin. Moreover, there is often physical evidence, such as a liquid pour pattern, that can determine the cause and origin of a fire. There are not nearly as many water damage cause and origin experts. In a water damage event it may be more difficult to prove the insured intentionally caused the loss. For example, it is more difficult to establish that an insured allowed their pipes to become frozen and burst. It may be difficult to establish through forensic evidence that a supply line to a washing machine or dishwasher did not accidentally fail.
Moreover, the magnitude of these property losses is sometimes as significant as in a fire loss. A home or business can suffer a total loss from a water damage claim just as if they were damaged by a fire.
Finally, the risk to an insured in a water damage claim can be less than in fire damage claims. It is unlikely that anyone is going to be killed in a water damage event. It is also less likely that someone is going to be criminally prosecuted. Knowing the risk versus reward of water damage claims leads insureds to intentionally cause a water loss for the exact same financial reasons they would normally burn down their home or business. A failed kitchen supply line is a great way to remodel a kitchen.
As Lether & Associates continues to see an increase of significant water damage claims, we have used traditional and new methods to contest these claims. These tools include requests for examinations under oath, recorded statements, public records, NICB referrals, site inspections, etc. Working with SIU groups and insurers, Lether & Associates is continuously developing new means of investigating these types of claims.
If you believe you are facing a suspicious water damage loss, feel free to contact Lether & Associates to discuss our ability to assist you.