True Crime of Insurance Fraud Video Number 50

I Did It

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Barry Zalma, Esq., CFE presents videos so you can learn how insurance fraud is perpetrated and what is necessary to deter or defeat insurance fraud.

Arson for Profit Admitted

One of my investigators met with the property manager of an Insured to start the investigation of a fire claim believed to be arson. Since he was just starting his investigation with a walk through the burned-out shell the investigator was making conversation with the property manager.

“Steve, how long have you managed this property?”

“About six months.”

“It seems the fire started here on the service porch where the damage is most severe; do you know how it started?”

“Sure,” the manager replied with confidence and no sign of concern “I pulled a mattress off one of the beds, stacked up against the wall by the service porch and lit it with a Bic lighter. Once it was burning well, I left and drove four blocks away and came back in time to see the flames coming from the building. I heard sirens so I just drove home.”

“Why did you do that?” the investigator asked, incredulous and trying to stay calm.

“The owner asked me to burn the building and said he would pay me 10% of whatever he got from the insurance company. When are you going to pay him? I sure could use the money.”

The investigator of the arson case was experienced. He knew better than to accept a confession, even one given under oath. The sworn statement was only usable to defeat the claim if it could be corroborated. Without corroboration it was useless. He explained the need for corroboration to Steve.

Arson is not Excluded – It’s Just a Fire

The Insured explained that he had recently been forced to fire Steve because his work was shoddy and some of the rent Steve collected never came to the Insured. Steve had threatened to cause harm to the insured and had almost succeeded.

The insured’s claim was paid in full. Steve, whose attempt to harm his ex-employer was blatantly stupid, he faced two felony charges: (1) Arson; and/or (2) perjury. His case was evaluated for possible prosecution and the prosecutor – since he felt no one was harmed since the insured was paid – refused to prosecute.

The insurer has also authorized counsel to sue Steve to recover the money it paid to the Insured. After checking Steve’s lack of assets, a decision was made not to sue.


Every claims investigation requires a thorough and complete investigation. A confession, like that of Steve in this video, is not always what it seems. Corroboration was needed and when it did not exist it turned out that Steve was just trying to hurt his employer. A false denial of the claims based on Steve’s confession would have been wrong and would have exposed the insurer to a bad faith lawsuit.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at and

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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