One of the trickiest parts of property insurance claims is the contents portion of the claims. Even if the insured saved receipts to prove the age and cost of personal property,those receipts are often stored in the same general place as the personal property and suffer the same fate as the personal property. Accordingly, policy holders and public adjusters are often left to estimate age and costs of personal property. This often leads to a great deal of litigation between policyholders and their insurance carrier.

This was the case in a New Jersey appellate case that was decided on August 26, 2014. In the case of Masaitis v. Allstate,1 the policyholders filed a claim for fire in their home. In addition to the structural damage, the policyholders claimed $934,581.75 in contents damage. Allstate estimated the personal property damages to be $308,215.71. Allstate considered the fire suspicious, and while the arson investigator could not determine the cause and origin of the fire, Allstate denied the claim. The policyholders filed suit and Allstate counterclaimed under the Insurance Fraud Prevention Act (IFPA), N.J.S.A. 17:33A-1 to -30.

The matter went to trial and Allstate presented evidence that at the time of the fire the policyholders were in dire financial straights and removed their pets from the home, removed family photos and certain other furnishings from the home. They also presented evidence that the policyholder had lied about having not been in the area of his home at the time of the trial. The jury also heard evidence concerning the personal property including two Rolex timepieces that the policyholders claimed were worth $70,000 but could not prove they ever owned and gave two different accounts as to where they were purchased. In the end, the jury ruled against the policyholders on their claims against Allstate and while they found that Allstate had not proven arson, they did rule that the policyholders had attempted to engage in insurance fraud. This resulted in an $807,980.90 against the  policyholders and in favor of Allstate.

The bottom line is when presenting a claim for contents damage or theft, it is imperative that the claim be accurate and verifiable. It is far better to leave questionable items out of a claim than to face an allegation of fraud. To do otherwise is to play with fire….

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1 Masaitis v. Allstate, A-4435-12T1 (N.J. App. Aug. 26, 2014).