Oct 26, 2009 4:04 pm US/Central
Bad Economy Ignites Arsons For Profit
CHICAGO (CBS) ―
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The bad economy has caused a spike in arsons for profits, insurance investigator Roger Krupp says.
CBS
The troubled economy and mortgage crisis have ignited a disturbing trend across the country: arson for profit.
Insurance companies and the FBI say with so many Americans drowning under their mortgages, some people are turning to arson to avoid foreclosure.
CBS 2's Mai Martinez reports.
Insurance company investigators like Roger Krupp from State Farm say the trend is alarming.
"We see these fires everywhere," he said. "We're looking at them in every community in the Chicagoland area right now."
Krupp has been a special investigator with State Farm for more than two decades, and as a Suburban Deputy Fire Chief, he's seen his share of arsons. But Krupp says the number of arsons for profit he's investigated in the past few years is staggering.
"There's a lot of things that happened with the mortgage collapse … a lot of people got into buildings they couldn't afford, and desperate times, they are doing desperate things," he said.
In fact, last year, State Farm investigated 89 possible arsons for profit in the Chicago area. This year, that number is expected to exceed 100.
"We've had situations where people have set fire with their family still in the home because that takes away suspicion," Krupp said. "We've seen situations where they've left family pets in the home to die in the fire, to take away suspicion."
He adds that it's not just houses people are burning.
"Motorcycles, cars, boats -- boats can be a big one," Krupp said. "Those are luxury items that, you know, if somebody's got a big loan on it, and they're not able to afford it, that's one of the first things that can go."
And all those payouts can add up. This year, in Illinois alone, State Farm expects to pay more than $170 million in fire claims.
That's up almost $25 million since 2006. Krupp says the increase is due in part to arsons for profit that can't be proven, and often involve large settlements. And that's bad news for everyone else with a policy.
"Since we're paying out more claims, yes, premiums will go up," Krupp said.
According to the FBI, the "arson for profit" problem is not just limited to homeowners. They say property flippers and real-estate investors have also resorted to committing arson to avoid foreclosure. According to the Chicago Police Bomb and Arson Unit, arson is considered a felony, and in some cases could carry a penalty of up to 30 years in prison.
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