True Crime of Insurance Fraud Number 34 - When “Obvious Fraud” is Wrong
Read the full article at https://www.linkedin.com/pulse/burning-bed-barry-zalma-esq-cfe and see the full video at https://rumble.com/vx1pcs-the-burning-bed.html?mref=6zof&mrefc=2 and at
and at https://zalma.com/blog plus more than 4100 posts.
Barry Zalma, Esq., CFE presents videos so you can learn how insurance fraud is perpetrated and what is necessary to deter or defeat insurance fraud. This Video Blog of True Crime Stories of Insurance Fraud with the names and places changed to protect the guilty are all based upon investigations conducted by me and fictionalized to create a learning environment for claims personnel, SIU investigators, insurers, police, and lawyers better understand insurance fraud and weapons that can be used to deter or defeat a fraudulent insurance claim
When “Obvious Fraud” is Wrong
Sometimes, what looks like an obvious arson for profit turns out to be an accidental fire. The insured lived near the ocean within the city limits of San Luis Obispo. Recently divorced she lived alone for many months. The divorce had caused her much emotional trauma. After twenty-five years of marriage, her husband announced he could not live with her anymore and moved out.
She sought treatment for her depression. She visited with multiple psychiatrists and psychologists, who only made her life more miserable.
Shortly before the divorce became final, walking aimlessly through an older part of town, she happened upon an occult bookstore. She bought a book on the power of the mind. The good book gave her a life purpose. She began to apply the principles stated in the book and found peace for the first time since her divorce. She became a regular customer of the book store. A friendship grew between her and the owner, who introduced her to others in San Luis Obispo interested in the occult and powers of the mind.
When the divorce was final and she gained absolute title to the land and house the book store owner moved into the house with her. As they, and their friends, concentrated their psychic energies, they became convinced that a major earthquake would strike California and destroy all who lived in San Luis Obispo.
The investigation by the fire department revealed that the fire was suspicious. No specific cause could be found for the fire. It did burn very hot. There were marks on the floor in the second bedroom that seemed to show a flammable liquid was spread. The insurer was concerned. It demanded the examinations under oath of the insured and her book store owner lover. Both testified clearly, concisely and honestly that they had no idea why the fire occurred.
Both testified, with vigor, concerning their belief in their psychic powers. Both denied adamantly any knowledge of the cause of the fire and explained why they sold the house because of what they believed was the oncoming major earthquake. They explained that they had purchased a house near Nashville because of the low taxes and the stable land below all of Tennessee.
The investigator advised the insurer that, after examining the bed and after reviewing the testimony of the insured and her lover at the examination under oath, it was his conclusion that the fire was the result of a short circuit in the bed motor which ignited the highly flammable (and now banned) polyurethane foam mattress. He explained that polyurethane foam, when heat is applied to it, liquefies and burns vigorously. The liquefied polyurethane foam flows on floor surfaces and leaves a trail similar to that left by the spreading of a flammable petrochemical accelerant.
The mystery solved; the insurer paid the insured the loss she incurred to her personal property. The two insurers split the cost of rebuilding the structure. The insured and her lover used the proceeds of the sale of the house and the insurance claim to move to the house they had found in Tennessee.
They now live in a large home on ten acres of land where they have gathered with them other believers in the occult and the power of the mind. Since both the insured and her lover were ministers of the Universal Life Church, they performed their own wedding and are living content, spreading the word of the power of the mind. Their wedding ceremony was interrupted by an earthquake from the New Madrid fault registering 3.2 on the Richter scale. Since they were Californian’s the two slept through, and never felt, the minor earthquake.
© 2022 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.
He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.
Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.
You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com, [email protected] and [email protected] . Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma; you can follow Mr. Zalma on Twitter at; you should see Barry Zalma’s videos on https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/featured; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/
Convicted Criminal Seeks to Compel Receiver to Protect his Assets
Post number 5291
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The Work of a Court Appointed Receiver is Constitutionally Protected
In Simon Semaan et al. v. Robert P. Mosier et al., G064385, California Court of Appeals, Fourth District, Third Division (February 6, 2026) the Court of Appeals applied the California anti-SLAPP statute which protects defendants from meritless lawsuits arising from constitutionally protected activities, including those performed in official capacities. The court also considered the doctrine of quasi-judicial immunity, which shields court-appointed receivers from liability for discretionary acts performed within their official duties.
Facts
In September 2021, the State of California filed felony charges against Simon Semaan, alleging violations of Insurance Code section 11760(a) for making...
When There are Two Different Other Insurance Clauses They Eliminate Each Other and Both Insurers Owe Indemnity Equally
Post number 5289
In Great West Casualty Co. v. Nationwide Agribusiness Insurance Co., and Conserv FS, Inc., and Timothy A. Brennan, as Administrator of the Estate of Pat- rick J. Brennan, deceased, Nos. 24-1258, 24-1259, United States Court of Appeals, Seventh Circuit (February 11, 2026) the USCA was required to resolve a dispute that arose when a tractor-trailer operated by Robert D. Fisher (agent of Deerpass Farms Trucking, LLC-II) was involved in a side-impact collision with an SUV driven by Patrick J. Brennan, resulting in Brennan’s death.
Facts
Deerpass Trucking, an interstate motor carrier, leased the tractor from Deerpass Farms Services, LLC, and hauled cargo for Conserv FS, Inc. under a trailer interchange agreement. The tractor was insured by Great West Casualty Company with a $1 million policy limit, while the trailer was insured by Nationwide Agribusiness Insurance Company with a $2 million ...
Opiod Producer Seeks Indemnity from CGL Insurers
Post number 5288
Read the full article at https://lnkd.in/guNhStN2, see the full video at https://lnkd.in/gYqkk-n3 and at https://lnkd.in/g8U3ehuc, and at https://zalma.com/blog plus more than 5250 posts.
Insurers Exclude Damages Due to Insured’s Products
In Matthew Dundon, As The Trustee Of The Endo General Unsecured Creditors’ Trust v. ACE Property And Casualty Insurance Company, et al., Civil Action No. 24-4221, United States District Court, E.D. Pennsylvania (February 10, 2026) Matthew Dundon, trustee of the Endo General Unsecured Creditors’ Trust, sued multiple commercial general liability (CGL) insurers for coverage of opioid-related litigation involving Endo International PLC a pharmaceutical manufacturer.
KEY FACTS
Beginning as early as 2014, thousands of opioid suits were filed by governments, third parties, and individuals alleging harms tied to opioid manufacturing and marketing.
Bankruptcy & Settlements
Endo filed Chapter 11 in August 2022; before bankruptcy it ...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lost the ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah. Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and wonder how did all these wonderful things come into being. Jews believe the force we call G_d created the entire universe and everything in it. Jews feel G_d is all seeing and knowing and although we can’t see Him, He is everywhere and in everyone.We understand...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
Read the full article at https://www.linkedin.com/pulse/passover-americans-barry-zalma-esq-cfe-5vgkc.
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lostthe ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah.
Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and ...
You Get What You Pay For – Less Coverage Means Lower Premium
Post number 5275
Posted on January 30, 2026 by Barry Zalma
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When Experts for Both Sides Agree That Two Causes Concur to Cause a Wall to Collapse Exclusion Applies
In Lido Hospitality, Inc. v. AIX Specialty Insurance Company, No. 1-24-1465, 2026 IL App (1st) 241465-U, Court of Appeals of Illinois (January 27, 2026) resolved the effect of an anti-concurrent cause exclusion to a loss with more than one cause.
Facts and Background
Lido Hospitality, Inc. operates the Lido Motel in Franklin Park, Illinois. In November 2020, a windstorm caused one of the motel’s brick veneer walls to collapse. At the time, Lido was insured under a policy issued by AIX Specialty Insurance Company which provided coverage for windstorm damage. However, the policy contained an exclusion for any loss or damage directly or indirectly resulting from ...
