NEW ORLEANS, Louisiana (AP) -- Some of the New Orleans homes drowned by the flooding that followed Hurricane Katrina have been damaged by a second calamity -- fire.Both Louisiana investigators and insurance companies are starting to look into the blazes amid reports that some may have been set by desperate people who had no flood insurance but want to collect on their policies."I can tell you we are aware of those kind of allegations, and we have seen claims where we view the fire as suspicious," said Allstate spokesman Bill Mellander."There has been an increase, or spike, in the number of claims in fire losses compared to what we would normally see," said State Farm Insurance spokesman Morris Anderson.The standard home owner's policy pays only for wind and rain damage, meaning that people without added flooded insurance weren't covered for damage caused by the water that submerged 80 percent of the city for weeks after Katrina."The rash of fires is concerning because we have a lot of homes that did not have insurance or had the wrong insurance," said Lt. Allen Carpenter, director of the fraud investigation unit for the Louisiana State Police.One arrest has been made in suburban Jefferson Parish, said fire department spokesman George Rigamer. A 26-year-old man was charged with setting fire to his parent's damaged house."Every fire is investigated," Rigamer said. "If something looks suspicious, if the fire has several points of origin, if there appears to be a propellent, it's going to get extra attention."The main type of homeowners' fraud that usually turns up after a hurricane is "claim padding," said Frank Scafidi, Director of Public Affairs at the National Insurance Crime Bureau."The policy owner has some damage, but during the period following the storm before adjusters get there they enhance it," he explained. "They knock the rest of the fence down, pull off the rest of their shingles."Two types of automobile fraud are turning up -- people passing off flood-damaged vehicles as undamaged and people claiming losses they did not have."The first couple of claims we looked at were people who evacuated but claimed their vehicles were stolen or flooded," Carpenter said. "They turned up hidden in malls in the cities the people had evacuated to. It's kind of unusual that the thief took them to the same city."Tips about people filing fraudulent claims have been pouring in from the public, Scafidi said.Companies are paying claims now but may investigate them later, Scafidi said."The idea is to settle, get people the money they need as quickly as possible," he said. "But just because they're paid doesn't mean we won't investigate."People caught filing fraudulent claims could face jail time. An attorney general's fraud task force set up after Katrina will investigate fraud involving as little as $2,000 as a federal offense, Scafidi said.The number of fraudulent claims is expected to rise as more people return to the area, Carpenter said."This loss has been devastating in so many ways -- lost homes, lost jobs, no money and not properly insured. People will try to recoup those losses somewhere," he said. "I understand the situation and the economic burden, but I have no sympathy whatever for those who try fraud to improve it."Copyright 2005 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.
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