Feb 27, 2008 9:59 am US/Eastern
Trend: Homeowners Torch Homes For Insurance Cash
Foreclosures Buck Disturbing Trend
DENVER, Co. (CBS) ―
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As homeowners are becoming more desperate amid rising home foreclosures, a disturbing trend is on the rise: homeowners setting fire to their homes in an attempt to cash in on insurance money.
CBS
Law enforcement and insurance companies are bracing for a rash of arsons and fire claims as some homeowners become more desperate amidst the sagging economy and struggling housing market.
Some homeowners faced with foreclosure are torching their homes for insurance money, experts said.
"It's unusual, but in today's society with what's going on it's becoming more and more popular thing to do," said Kevin Dougherty, the Teller County Sheriff.
Dougherty said Karl Mann allegedly set fire to his house in Woodland Park the same day deputies posted an eviction notice on his door. Investigators said Mann packed his stuff, poured camping fuel in the basement and set fire to the home he'd lost in foreclosure.
Similar cases have made headlines in California, New York, Iowa, Indiana and Illinois. In one case, a man was charged with faking a hate crime to cover up the arson. A Texas Supreme Court judge was also indicted on charges of burning his house for insurance money.
"Anytime, in this kind of crisis situation, with our own personal finances, it can put people in a desperate situation and desperate people sometimes do desperate things," said Bob Blume, a State Farm Insurance investigator.
Blume said he's seen lots of suspicious fires.
"Even in a fire that a house is burned to ground, they think there's going to be no evidence left and people are surprised at what we can find in the ashes and the rubble," he said.
Ultimately, everyone is the victim of insurance fraud. It costs an estimated $30 billion a year. The average cost for a policy holder is about $300 a year in premiums.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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