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The Investigative File: Insurance Company

by Guy E. Burnette, Jr., Esquire


The investigative file for an insurance company handling an arson case should be complete by the time the matter is set for trial. The file should be thoroughly reviewed and organized in preparation for testimony at trial. When the insurance adjuster or SIU representative in charge of the claim compiles the records which will be part of the investigative file used at trial, the following folders are likely to appear in the file.

Contents


Policy - A certified copy of the policy and declarations page will be needed in every trial. In order to prove the contractual defenses, the contract will need to be received into evidence. The policy should be pre-marked with an exhibit label for that purpose.

Application - The original policy application will be admitted in evidence at many civil arson trials. If it is not signed by the insured/applicant, it may need to be authenticated at trial through the testimony of the agent. See How to Analyze Insurance Documents in a Fire Investigation: The Homeowner Application for information on how to use application information in the investigation.

Agency Records - Most of the records from the producing agency file need to be collected for possible use at trial. Any telephone messages, correspondence or other records of communications with the insured should be included. An inspection report or photographs taken when the policy was issued will be important evidence. Payment records and cancellation/non-renewal notices may be included in the agency file.

Underwriting Records - While this may contain many of the same items found in the Agency Records file, there will be other important records from the Underwriting file. Information about any other claims filed by the insured may be found in the Underwriting file. It should contain rating information about the size, style, age and construction of the building or residence. Endorsements changing coverage type or amount should be made a part of this folder in the file. See The Underwriting File for more information on what is contained in Underwriting Records.

Inspection / Loss Control Reports - These are reports usually taken from the Underwriting file which contain detailed inspections and evaluations of the insured location from a Loss Control/Safety standpoint. The reports may include photographs and diagrams of the premises, noting any safety or fire hazards which were found. The photographs can provide important information about the location of items inside the building and may reveal when things have been moved or taken out of the building before the fire.

Premium Payment Records - These records are important evidence in cases where financial motive is an issue. They may show chronic delinquent payments prior to the time of the fire as a pattern of financial problems. They may show a policy which was suddenly paid-off shortly before the loss or a scheduled premium payment around the time of the fire which was actually made ahead of time when all of the others were always late.

Cancellation / Non-Renewal Notices - This information will also come from the Underwriting file and will show any cancellation or non-renewal notices to the insured indicating that coverage was going to be terminated. That may shorten the policy term shown on the declarations page and may have significance relative to the date of the fire.

Loss Notice - This document shows the first report of the fire to the insurance company and is usually sent in by the agent, after being notified by the insured. It can contain important information about when and how the insured learned of the fire. The time when the loss was first reported to the insurance company may take on significance relative to the other activities of the insured on that day. It may contain information from the insured which contradicts his later testimony in a recorded statement or Examination Under Oath. See How to Analyze Insurance Documents in a Fire Investigation: Loss Notice for information on how to use loss notice information in the investigation.

Proof of Loss - This is a key document in the case and will be pre-marked as an exhibit to be introduced at trial. The folder should contain the original Proof of Loss signed by the insured. See How to Analyze Insurance Documents in a Fire Investigation: Proof of Loss for information on how to use proof of loss information in the investigation.

Building Estimates - This folder should contain the estimates of structural damages prepared for the company and for the insured. This may include preliminary estimates by the adjuster, as well as a detailed contractor's estimate prepared by a licensed builder.

Contents Inventory - The original inventory forms submitted by the insured detailing the personal property claim will always be admitted as evidence. Where there has been fraud by the insured in the presentation of the claim, this will be a prime exhibit.

Contents Worksheets - These papers analyzing the insured's contents inventory on the claim will be useful in establishing the actual damages to the property, as well as identifying any fraud in the claim on the type and value of items.

Contents Records and Receipts - The original records and receipts submitted by the insured should be included in this folder, together with any receipts and records obtained from the stores or suppliers where the items were allegedly sold. If the records show fraud in the claim, they will be used as trial exhibits to prove the fraud.

Contents Photos and Diagrams - Any photos of the contents taken before or after the fire should be in this folder. Also, any diagrams showing the location of the items at the time of the fire made by the insured or any diagrams by the investigator after the fire should be part of the investigative file. Where items were not found after the fire or where items were shown to be of a different type or value than the insured claimed, this will be important evidence in the case.

Deed - A copy of the deed from the courthouse showing the ownership of the property is sometimes needed at trial. Where there were prior transactions involving the property relevant to the case, those records should be included as well.

Purchase Contract - The Purchase Contract when the insured acquired the property may be relevant to the case. It may be important to show the value of the property, as well as its condition and any equipment, fixtures and personal property included in the sale of the property.

Appraisals - There may be various appraisals of the insured property. There is usually an appraisal in conjunction with the purchase of the property, especially where there has been mortgage financing. Subsequent appraisals in anticipation of later selling the property may show any changes in the value and condition of the property. Sometimes an appraisal is conducted after the loss to show the estimated value at the time of the fire and the value of the remaining land.

Property Tax Assessment - The Property Tax Assessment is usually not a reliable indicator of market value, but may be useful in the context of other records. It may also show the insured's valuation of the property where a tax assessment has been challenged as being too high.

Property Tax Payments - The payment records for property taxes are often used as evidence to show financial problems. When the property taxes have not been paid, it is an indicator of significant financial problems in most cases.

Other Mortgages / Loans - If there is a second mortgage on the property or some other form of secured loan, the records should be in this folder. They may relate to the financial condition of the insured in showing increasing debt during the time preceding the fire.

Other Mortgages / Loans Payment Records - These records may provide important information about the amount of the insured's other obligations and the pattern of payment for those obligations. They may prove the existence of mortgages or loans which were undisclosed by the insured in the claim investigation.

Liens / Filings - The records of any liens or other filings against the property will likely be used as evidence at trial. Tax liens for unpaid tax assessments and judgment liens are a significant indicator of financial problems. Certified copies of the liens should be obtained from the Clerk of Courts or Registrar of Records.

Origin and Cause Report - Although the Origin and Cause Report will not be offered in evidence as a trial exhibit in most cases, it is necessary to have it in the investigative file taken to court. Unless the adjuster or SIU representative directly participated in the fire scene investigation, it may not be directly used. However, it may become an issue during cross-examination when the objectivity of the investigation is being challenged or the underlying arson defense is questioned. It may be used to illustrate testimony about the location of items at the fire scene, particularly items on the claim which are being challenged. As an integral part of the case it should be there in the investigative file.

Lab Report - Just as the Origin and Cause Report may become an issue during trial testimony, the lab report should be in the investigative file. Certainly, the results of the analysis and the analytical methods can only be challenged when cross-examining the chemist or laboratory analyst. However, as an important part of the proof of the incendiary origin of the fire, it should always be contained in the investigative file.

Miscellaneous Expert Reports - When additional experts have been involved in the case, such as metallurgists, fire protection engineers, electrical engineers or other such experts, their reports should be in the investigative file. There should be a separate file folder for each expert report. While it is not expected the adjuster or SIU representative will be questioned about the methods and findings of the experts, it may become an issue in cross-examination about the overall case.

Fire Department Reports - The Fire Department Reports, including the "run report" or fire response report, should always be in the investigative file. While the reports and information cannot be used by the adjuster or SIU representative to establish the facts and findings in those reports, the information may be needed to respond to questions about the reasons for the denial of the claim and the information on which the case has been built.

Police Reports - The police reports should be in the investigative file in every case. The information from those reports cannot be directly testified to by the adjuster or SIU representative, but may have relevance to other factors in the case about which the witness may testify.

Fire Marshal Reports - The report on the investigation of the fire by the public agency investigator (Fire Marshal, Fire Inspector or Fire Investigator) should be in the investigative file even though the adjuster or SIU representative may not directly testify about the information and findings in those reports. When challenging the basis for the denial of the claim, the reports may be referenced to point out any discrepancies or conflicts between those reports and the report of the expert retained by the insurance company.

Immunity Act Letters - A separate folder should be created for the Arson Immunity Reporting Act letters documenting the information provided to the designated law enforcement agency under the applicable statute. This may be an issue in cross-examination if it is suggested there was an improper relationship between the insurance company and the public agency authorities.

Fire Scene Photographs - The fire scene photographs which will be used to establish the origin and cause of the fire should be enlarged for display to the jury. A separate set of the photographs, properly marked and labeled, should be in the investigative file. Any photographs which may not have been enlarged should be in the file in case there is an issue about something at the fire scene which is not shown in the enlarged photographs. Photographs taken by the adjuster or SIU representative should be in the file, as well. Important photographs taken by the adjuster or SUI representative will be enlarged for display to the jury. Photographs taken by the insured, fire department, fire investigator, neighbors or any other source should be in the file, as well.

Fire Scene Video - If the fire scene was filmed on videotape, during the fire or during the investigation, it will be used as evidence at trial. The original tape should be in the investigative file, pre-marked and labeled as a trial exhibit. If only excerpts from the video will be shown to the jury, an edited copy should be in the file along with the original tape.

Fire Scene Diagrams - All of the fire scene diagrams should be in the investigative file. This includes diagrams prepared by the fire investigators, the insured or any other person in the case. Most of these diagrams will be enlarged for use as demonstrative evidence at trial. The original diagrams need to be in the investigative file to verify the accuracy of the enlarged copies and to be admitted as evidence, since most courts require reduced copies of demonstrative evidence to facilitate storage in the event of an appeal.

Building Plans / Blueprints - The building plans or blueprints should be in the investigative file for potential use as trial exhibits. If enlarged copies have been made for use as demonstrative evidence, the originals will need to be maintained to verify the authenticity of the enlargements and to admit in evidence in place of the enlarged copies used for demonstrative evidence.

Utilities Records - The various utilities records (electric, sewer, gas, water, etc.) often will be used as evidence at trial. All such records should be pre-marked and labeled as trial exhibits to be offered during the testimony of the appropriate witness. They must be properly authenticated.

Telephone Records - The telephone records may be evidence in the case and should be in the investigative file. If they are going to be offered into evidence, they will need to be pre-marked and labeled as trial exhibits. They must be properly authenticated.

Delivery/Newspaper/Mail Records - Delivery records for the residence or the business, including newspaper and mail delivery records, may be significant evidence in the case to prove the occupancy of the premises or the identity of the occupants. These records will likely be used as evidence in the case. They need to be properly authenticated, then pre-marked and labeled as trial exhibits.

Timeline/Flow Charts - A timeline showing the chronology of events in the case is an excellent example of demonstrative evidence. Similarly, a flow chart or link analysis of the witnesses and evidence can provide a visual depiction of the case. Most of the time these will be enlarged for dramatic effect at trial. A copy should be kept in the investigative file for reference during testimony and/or admission in evidence in place of the larger exhibits.

Bank Records - In an arson-for-profit case, the bank records will almost certainly be used as trial exhibits. They should be organized in the proper chronological order, pre-marked and labeled as trial exhibits. A marked copy should be kept in the investigative file for reference during testimony to highlight the significant entries in the records.

Creditor Records - Creditor records will likely be used as trial exhibits and should be properly organized in the investigative file. They should be pre-marked and labeled as trial exhibits. Marked copies should be in the investigative file to refer to when discussing the significant entries in the records.

Business Books - The business books should be in the investigative file and prepared for admission in evidence. They should be organized in the proper order, pre-marked and labeled as trial exhibits.

Income Tax Returns - The income tax returns of the individual and/or business will almost certainly be evidence at trial. They should be properly organized and authenticated if the originals are not in the file. They should be pre-marked and labeled as trial exhibits.

Miscellaneous Tax Returns - Other types of tax returns, such as sales tax, payroll tax, intangible tax and the like should be in the investigative file and ready to be offered as evidence. If the originals are not available, properly authenticated copies should be in the investigative file. They should be pre-marked and labeled as trial exhibits.

Financial Statements / Balance Sheets - Financial statements and balance sheets relating to the individual and/or business should be in the investigative file. They will likely be offered in evidence and should be prepared accordingly. If original documents are not available, the copies should be authenticated to ensure their admissibility at trial. They should be pre-marked and labeled as trial exhibits.

Financial Analysis - Where a forensic accountant or other financial expert has been retained in the case, a copy of the report should be in the investigative file. The original may be offered in evidence through the testimony of the accountant or financial expert. However, a copy should be in the investigative file and ready for reference by the adjuster or SIU representative when testifying about the basis of the denial and the evidence of financial motive.

Witness Statements - The transcribed or written statements of all witnesses in the case should be in the investigative file. A separate copy will be in the witness folder of each witness for use by the attorney when calling those witnesses to testify. The adjuster or SIU representative may need to refer to the facts on which the denial was based and some of those facts may come from the witness statements. The copies in the investigative file should be highlighted for ready reference during testimony or cross-examination.

Witness Tapes - A copy of the tape of any recorded statement of a witness should be in the investigative file. Where the statement was taped by the adjuster or SIU representative, there may be a question about the accuracy of the statement or the method of interrogation. The tape may be needed to respond to those issues. The original tape should be in the witness folder of each witness for use by the attorney when calling the witness to testify.

Witness Summaries - A summary of the statement of each witness should be in the investigative file with the significant portions highlighted. While the adjuster or SIU representative generally cannot testify to the statement of another witness, an issue may arise during cross-examination about the information developed in the investigation and the factual basis of the decision to deny the claim.

Insured Statements - Any written or transcribed recorded statements of the insured should be in the investigative file. Unlike the statements of other witnesses, the adjuster or SIU representative may be allowed to testify about the statements of the insured which are considered an exception to the general rule about hearsay. Particularly where the information in the statements will be used to establish the misrepresentation/fraud defense, they need to be available for the adjuster or SIU representative during testimony at trial. A highlighted copy should be in the investigative file for easy reference to the important parts of the statements.

Tapes of Insured Statements - The original tapes of any recorded statements of the insured should be in the investigative file. They will likely be used as evidence of the misrepresentations or fraudulent statements of the insured. They should be pre-marked and labeled as trial exhibits in preparation for their admission at trial. Not surprisingly, the insured will often deny having made the statement when the case comes to trial and the tape can prove otherwise.

Insured Statement Summaries - Any statements of the insureds taken in the case should be summarized and put in the investigative file. This allows the adjuster or SIU representative to easily find any significant portions of the statements which may become an issue at trial.

Examination Under Oath Transcript - The transcript of the Examination Under Oath should be copied and put in the investigative file. The original will be pre-marked and labeled as a trial exhibit in the witness file of the insured used by the attorney. It may be necessary to refer to the transcript in testifying about a statement of the insured, particularly a misrepresentation or false statement.

Examination Under Oath Summary - A summary of the transcript of the Examination Under Oath should be in the investigative file with the key portions highlighted. This allows for easy reference at trial when testifying about the statement of the insured during the Examination Under Oath or when cross-examined about the Examination Under Oath.

Examination Under Oath Exhibits - The original exhibits from the Examination Under Oath will be in the witness file of the insured for use by the attorney. Copies should be in the investigative file for reference during testimony about the records produced or diagrams drawn by the insured.

Miscellaneous Files - The list above is by no means complete and every case will have items unique to the case which need to be contained in the investigative file. If it is appropriate to the particular case, it should be in the investigative file.

Reprinted with permission from the author.

 
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