Homeowner insurance is so important to protecting a structure against catastrophic loss. Sometimes, though, people will buy insurance policies with the intention of losing the property and collecting from the insurance company. This is called fraud.
In Georgia, like every state, such fraudulent schemes are decidedly against the law because they take advantage of homeowner insurance companies and are perpetrated through deceit. Lying is involved and surreptitious buying of insurance policies that far exceed the value of the structure being insured.
An example of this mischief allegedly occurred last year in Georgia when half a dozen people were arrested for serial purchases of mobile homes in several areas of the state. In 2009 and 2010, the homes burned and the owners collected on the insurance policies. Suspicion arose when sheriff’s investigators noticed similarities in the type of home involved in each fire, the way it was purchased, the nature of the fire that consumed it, and the homeowner insurance policies that covered it.
An investigator characterized the activity as “arson for profit.” In other words, homeowner insurance companies were defrauded in the scheme, agreeing to sell insurance on the homes on the assumption that the policy-buyers were sincerely interested in protecting their properties against loss. In fact, the interest was in destroying the homes for gain.
While such fraudulent schemes are not unusual, they are brazen. How often they work isn’t known for sure, but it is not unusual for law enforcement and insurance investigators to uncover evidence of arson and of manipulation of insurers. Perpetrators of such scams face years in prison if they are caught.
Georgia is appealing as a target for insurance fraud artists because it is a large state—the largest in the Southeast—with both big cities and rural areas. Much of the rural landscape is covered with pine forest, allowing unprincipled people to burn down their homes without much chance of discovery.
On the other hand, The Peach State is home to major industries, is a tourist magnet because of its history and geography, and is the major wholesale and retail distribution point for the Southeast. This economic vitality reduces the financial pressure on people who are inclined to skirt the law and make money the easy way—by defrauding someone else.