Chapter VIII: Insurance Detectives

Insurance companies, both life and fire, offer a very broad field for the detective. In fire insurance, practically every fire is of unknown origin. A percentage, of course, are regular “burn-outs”, where the proprietor or owner is seeking to defraud the insurance company.

Fire insurance companies, however, must act very cautiously to not reflect suspicion on anyone, as they might be sued for damages. Fire insurance companies, therefore, never accuse anyone until they have the positive proof, and in order to get this proof careful detective work is necessary.

It is astonishing how many fires of this “burn-out” class occur. Men, engaged in business, carry a large stock of goods, and fail to make their business pay. They see disaster staring them in the face and they deliberately set fire to store and contents in order to save themselves. Others have their money invested in buildings; bad luck overtakes them, the buildings remain idle, and they plan to “burn-out” and collect the insurance. As mentioned above, even where all indications point to the owner setting fire to his own property, yet the fire insurance company dare not accuse him. Instead they delay settlement on some pretext or another, meanwhile investigating all phases of the fire. There is a wonderful opportunity in this work for good, ordinary detective work. In the case of a suspicious fire, the detective secures all the information possible without allowing the suspected man to know an investigation is being made.

It is well to find out the man’s past history, where he was located previously, whether he had any previous fires, or failures, what his reputation has been, whether he had any expensive habits, also whether his business at the present location was on a profitable basis, together with all conditions relating to his taking out the present insurance.

In investigating “burn-outs” the detective must follow the same policies as the insurance companies and be careful to avoid throwing suspicion on anyone. He must work along the lines suggested by the insurance company, and with only one object in view--to secure facts. He must not draw his own conclusions that the man is guilty--he is not being paid for his opinion. He must secure all the facts possible as directed by the insurance company and place these facts in the hands of his company to be dealt with by the latter as their judgment directs. He must also remember the company will not prosecute unless the evidence is positive and honest.

In reports on this line of work the detective should make the information stand out plain and clear and give facts which he has learned in a truthful and unbiased manner. He must be honest with the man under suspicion as well as the company, as many fires have all the earmarks of crooked “burn-outs” and yet turn out to be regular accidents and perfectly legitimate.

Frequently, it is necessary for the detective to spend lots of money in getting into the confidence of a man suspected of incendiarism. If the evidence points strongly to incendiarism, however, the company is willing to spend money to catch him, as he might be the cause of a great number of “burn-outs” unless stopped permanently.

It was only a few years ago the insurance companies in a large city suspected that there was a regular arson gang operating, due to the fact that they had so many suspicious losses, altogether amounting to more than a million dollars. I was employed for the purpose of making this investigation, and to determine whether it was one organized gang doing this work or whether it was being done by various individuals acting independently of each other.

After several months of hard work and careful investigation I determined that the most of the big fires were being done by an organized gang, and after further work, with the assistance of the local city detective department, I succeeded in rounding up this gang, which not only included the real fire bugs and the persons insured, but an insurance solicitor, an insurance agent, and an insurance adjuster. The fire bugs were caught red-handed with several barrels of gasoline, hundreds of feet of fuse and powder, as they entered a big plant for the purpose of burning the same. These men were tried and convicted, as the evidence against them was complete.