Police, fire, and insurance officials close ranks on arson-for-profit

They're the ones who buy insurance on old buildings and later burn them down. No one knows exactly how many of them there are or how much profit is made from the arson they practice, but estimates of annual property damage from arson in general range from $1 billion to $10 billion.

For years, for a variety of apparently logical reasons, cracking down on those who commit arson for profit has been a low priority for most law-enforcement agencies. Lines of jurisdiction between police and fire departments have never been clear. Other crimes have long been considered more serious. And arson cases, often lacking witnesses and hard evidence, have ben notoriously tough to prove. Nationally, the conviction rate in arson cases is less than 1 percent.

But there are increasing signs that awareness -- both of the seriousness of the problem and of the need to find more effective ways to curb it -- is growing:

* Insurance companies, long criticized for dragging their feet and for frequently raising premiums rather than resisting claims, have recently spawned a number of industrywide organizations aimed at better tracking of arson-for-profit cases.

* Many cities and states have set up arson task forces with police, fire, insurance, mayoral, and citizen representation for a more coordinated attack on the problem. Most experts in the field see this move as highly significant but complain that too often the membership in such groups is not broad enough and that, despite their value as a communicatin link, many go out of business after issuing one report or a set of recommendations.

* More Arson-for-profit cases are heading for court and leading to more convictions. Thanks partly to the vigorous efforts of the recently formed Coordinating Council on Arson for Profit and a local reward program for tips leading to the capture of arsonists, the number of arson- for-profit fires in 1980 dropped sharply in Chicago, and the conviction rate in Cook County arson cases taken to court reached an unusually high 63 percent.

In the eyes of some experts, the lack of reliable national data on arson for prodit remains a serious roadblock to effectively countering it. Many such fires are written off as "of undetermined origin," and fire departments and insurance companies keep such widely varying records that no national tally is considered trustworthy. To some extent, moving the crime's status up a notch on the federal level to a major crime or felony under the FBI crime reporting system -- as a bill sponsored by Sen John Glenn (D) of Ohio would do -- would help the statistics gathering.

Insurance companies bristle at criticism that they have been less than vigorous in the fight against arson for profit. They insist their hands have been tied by restrictive laws that require them to pay even suspicious claims promptly or be sued; insure even the most risky property; give long advance notice before canceling any insurance policy, and open themselves to possible prosecution for sharing information on suspicious fires with law-enforcement agencies. Accordingly, they are working for changes in these laws even as they try to attack the problem through new organizational efforts.

One relatively new industry activity widely regarded as promising is the Property Insurance Loss Register (PILR) in New Jersey. Through a computer file it can quickly cross-check property data to show any repeat patterns of loss.

The Alliance of American Insurer's Property Loss Research Bureau (PLRB) in Chicago also is helping by its new efforts to improve training for insurance adjusters. While not professional investigators, these are often the first company representatives on the scene, and their reports usually decide whether or not the company will probe the incident further.

Although sharply critical of the insurance industry for what he sees as paying "lip service," rather than action- based attention, to the problem, Dr. Charles Sisson of Battelle Memorial institute's Center for Arson Prevention Training and Analysis calls the PLRB training move the industry's "first real thrust forward that makes sense."

Still another industrywide effort to crack down on fraud in general, including arson for profit, is the Insurance Crime Prevention Institute (ICPI). It works as an industry liaison with law-enforcement agencies, supplying them with file material on suspicious claims.

While everyone agrees that legal restrictions do make the insurance industry's job in cracking down on arson for profit more difficult, some arson experts argue that insurers can and should do more to prevent such crimes in the first place.

A proposal that could strengthen the industry's prevention role is a requirement in the Glenn bill that private insurers, before issuing a FAIR (Fair Access to Insurance Requirements) plan policy, get an evaluation of the property and share this specific information (where appropriate) with law-enforcement agencies. The FAIR plan was launched after the urban riots of the 1960s as a federal backup to insuring property in risky areas. A General Accounting Office report of 1978 said the program was too quick to write insurance on buildings with a high risk and too quick to pay off claims.