Electrical Issues Top 2017 Causes of Loss

Pie chart showing causes of loss in 2017, as determined by the Special Investigations groupElectrical issues continue to be a leading cause of fire, according to Grinnell Mutual’s Special Investigations. Other leading causes of fire included combustibles near a heat source, incendiary (fires set intentionally), heating systems, smoking, and natural causes. Of the 724 cases Special Investigations dealt with in 2017, 456 were fire or explosions. More than half had a determined cause of fire.

According to research by the National Fire Protection Administration, fires caused by electrical equipment — wiring, lighting, cords, and plugs — is the top cause of property damage in home fires in the United States. NFPA reported that in 2017, fire departments responded to an average of 358,500 home structure fires, which caused 2,510 fire deaths, 12,300 injuries, and $6.8 billion in damage.

Seeking the truth

The work of our Special Investigations team is another way that Grinnell Mutual makes good on the promise of its insurance policies. Investigators work with claims adjusters to help determine what happened.

“We help the adjuster get claimants back to where they were before their loss,” said Dave Miller, assistant vice president of Special Investigations.

“As an investigator, my role is always to find the truth. We’re truth-seekers and fact-finders,” said Becky Nelson, an investigator. “We want to find out all the facts before going forward. We all work together for the end goal — finding out the truth.”

saving policyholders MONEY

What Special Investigations does every day reduces insurance fraud, which can save policyholders money. The most recent Report to the Nations on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners found that the median insurance fraud case in the U.S. cost $120,000.

In one 2017 Grinnell Mutual case, an adjuster referred a claim to an investigator, who verified that the damage to an insured’s property had happened prior to the claim. The company referred the case to the Iowa Insurance Division and local courts, where the defendants pled guilty to fraudulent practices in the third degree, an aggravated misdemeanor.

“It was a $240,000 loss and we ended up paying nothing,” said Miller.

“Insurance companies…play a very important role in deterring insurance fraud by denying claims such as this,” Iowa Insurance Commissioner Doug Ommen said in an Iowa Insurance Division release about the case. “Insurance fraud is not a victimless crime and we will continue to help ensure those attempting to commit insurance fraud are held accountable.”

For more information

If you suspect fraud or arson, report it to local law enforcement. Next, call your insurance agent or company or the state insurance department.

You can also call Grinnell Mutual's Fraud and Compliance hotline at 855-467-2372. Our Fraud and Arson Award program provides up to $10,000 for providing timely and credible information about a fraudulent or criminal loss to people or property insured by Grinnell Mutual or one of our member mutuals.