A party who intentionally sets fire to their property with the purpose of collecting insurance money on that property is guilty of arson with the intent to defraud an insurer. Arson with the intent to defraud an insurer is a state law offense and can either be included within the general arson statute or exist as its own charge.
Due to the possibility of arson with the intent to defraud, insurance companies and local governments generally employ arson investigators who visit burned property to determine the likelihood of possible arson before the insurance company indemnifies the policy holder.
In addition to criminal penalties, a party found guilty of arson with intent to defraud an investor will not be indemnified for the damage caused by the fire or other explosives.
[Last updated in June of 2022 by the Wex Definitions Team]