Fire Claims > Nature of Frauds

The insured is dealing with various type of seeds. Actually he is dealing with normal agricultural seeds as Claimsd as hi brid seeds. There was a fire in the godown, in which one car and one bike was burnt along with the seed stocks and he lodged a claim of Rs.1.0 Crores on account of stocks. On detailed investigation, we found that:

1. They are dealing with normal seeds not with high brid seeds.

- The books and records produced by the insured as fake and even the balance sheet produced was fake and not signed by the Chartered Accountant firm.

The purchase bills are fake although confirmation wee received, but all were sent by insured himself

There is no electricity connection in the affected godown and the cause of loss was also found to intentional to get the false claim.

All the transactions were made through cash only.

The insured having one separate policy from other insurance company for the same stocks and also Claimsd from both the insurance company and never disclosed about the policy of from different insurance companies.

History : We also enquired about the history of the insured and it was learnt that he is a cheater and obtained a claim from LIC on his father name after declaring the age of his father as 50 years (actually the age was around more than 80 years)

Case-2

The insured having a plastic cup of milk foods/ ice cream manufacturing unit and the plant & machinery and stocks hypothecated with bank and bank was arranged the insurance policy and the same was expired in June and they not renewed the same. In Aug. there was a fire in the premises and the plant & machinery and stocks were badly damaged and the banker arranged the policy on back date and created the documents as the DD for premium of insurance on back date. However on our investigation detailed verification, the facts came to light and insurance company rejected the claim.

2. Draft issue register showed cuttings of dates and draft number.

3. Letter for insurance showed the signature of development officer at 12.30pm, whereas fire took place at 9.30 on the same date

It was ultimately proved that the branch manager had issued the draft in back date after the loss and the Branch Manager, insured and development officer is in jail.

Case-3

There was a fire in a tend house and they Claimsd Rs.40.0 Lacs. On verification of the documents, it was observed that the purchase bills provided by the insured are fake and even the firms of such name is not existing. They also failed to prove the ownership of the damaged tent house.

Case-4

There was a fire in a plastic chappal factory and they Claimsd Rs.97.0 Lacs. On verification of the documents, it was observed that the purchase bills provided by the insured are fake and even the firms of such name is not existing.

Case-5

In this case, the insured is a dealer of fabrics to various Govt. Agencies and there was a fire in the godown and goods worth 3.5 Crores Claimsd. On verification of VAT returns, we found that there is a variation of Rs.2.25 Crores in between the sales ledger provided and the sales declared the VAT returns and we detected the same and disallowed.

4. Sales not shown in the ledger account valuing Rs.2.25 Crores

5. Rejected stocks was there, not disclosed.

Case-6

In this case, the insured having a cold storage where they kept various types of sea foods and there was a fire in the godown and they Claimsd Rs.8.0 Crores. On investigation, it was observed that the stocks burnt are dead and deteriorated stocks, which were imported by a X party and the same was kept in the Port of Custom Clearing for long time and during such period the stocks were damaged and the Custom Authority asked the importer to dispose the same as the same is not fit for human consumption. However the insured purchased the damaged material and kept in the cold storage and lodged a claim with underwriters.

• The sea food items were already damaged while kept for custom clearance.
• The Insured purchased the damaged stocks and kept in the cold storage and lodged a claim stating that the material damaged due to the variation in the cold temperature.

Case-7

This is a Zari Manufacturing unit. The insured having various manufacturing units in rural area and on verification and detailed investigation from various agencies, it was observed that there is no insurance coverage for the affected location and subsequently rejected the claim.

• The affected location is not covered under the policy
• The insured removed the name board (address board) from the affected premises and explained that the affected location is one of such location covered under the policy.
• Manipulated the rent agreement and changed the address in it.

Case-8

This s a paper mill and there was a fire in the raw material (waste paper) and on verification of the books and records, and investigation from various sources, it was found that the insured having a other paper mills and most of the stocks Claimsd were actually kept there and we have restricted the claim to actual physical loss.

• Bonafide large purchases made just before the loss.
• The purchases leading to creation of stocks were 99% unpaid i.e no payment to the suppliers were being made
• There is no proof / records available that proving the arrival of rawmaterial in the affected factory
• Record proved stocks, but due to two location physically some stocks were lying in unaffected unit and but were Claimsd in loss, hence rejected that portion of stocks

Case-9

This is a plywood manufacturing unit and there was a fire in one of their godown and stocks worth Rs.1.25 Crores Damaged. On detailed verification and investigation from local authorities, it was found that the affected building was having specific building number having separate insurance policy in the name of their sister concern (Kohinoor Plywoods) for Rs.2.0 Lacs only and the insurance policy of Western India Plywood not covers the affected building and the claim was finally restricted for Rs.2.0 Lacs only.

Case-10

There is fire loss in a godown (Delhi) of a Mumbai based transporter. And Claimsd Rs.1.0 Crores of fabric damaged in the fire. On verification, we found that:

• There is no business activity in the affected godown since long time
• There is dispute with the land lord on rent issue.
• Physically only minor stocks were found burnt there.
• On the next day they thrown away the burnt stocks
• During investigation, it was found that they are operating from a different godown and all the stocks are kept there only and the damaged stocks are very old and dead stocks only.