Insurance representatives see rash of suspicious fires

NEW ORLEANS (AP) -- Some of the New Orleans homes drowned by the flooding that followed Hurricane Katrina have been damaged by a second calamity -- fire.
Both Louisiana investigators and insurance companies are starting to look into the blazes amid reports that some may have been set by desperate people who had no flood insurance but want to collect on their policies.
"I can tell you we are aware of those kind of allegations and we have seen claims where we view the fire as suspicious," said Allstate spokesman Bill Mellander.
"There has been an increase, or spike, in the number of claims in fire losses compared to what we would normally see," said State Farm Insurance spokesman Morris Anderson.
Standard policy
The standard home owner's policy pays only for wind and rain damage, meaning that people without added flooded insurance weren't covered for damage caused by the water that submerged 80 percent of the city for weeks after Katrina.
"The rash of fires is concerning because we have a lot of homes that did not have insurance or had the wrong insurance," said Lt. Allen Carpenter, director of the fraud investigation unit for the Louisiana State Police.
One arrest has been made in suburban Jefferson Parish, said fire department spokesman George Rigamer. A 26-year-old man was charged with setting fire to his parent's damaged house.
The main type of homeowners' fraud that usually turns up after a hurricane is "claim padding," said Frank Scafidi, Director of Public Affairs at the National Insurance Crime Bureau.
Two types of automobile fraud are turning up: people passing off flood-damaged vehicles as undamaged and people claiming losses they did not have.
People caught filing fraudulent claims could face jail time. An attorney general's fraud task force set up after Katrina will investigate fraud for as little as $2,000 as a federal offense, Scafidi said.