Up In Smoke–A Pyrrhic Victory For An Insured

Whoever determines the “Darwin Natural Selection Awards-Criminal Category” has chosen as this year’s winner a North Carolina man, who would also be eligible for the “Chutzpah Award” and the “Just Desserts Award,” if they existed. The story, which is presented as a factual happening, is as follows: A Charlotte, NC man, having purchased a case of very rare, very expensive cigars, insured them against fire (among other things).

Within a month, having smoked his entire stockpile of cigars without even having made his first premium payment on the policy, he filed a claim against the insurance company. In his claim the man stated that the cigars were lost “in a series of small fires.”

The insurance company refused to pay, citing the obvious reason that the man had consumed the cigars in the normal fashion. The man sued and won. In delivering the ruling the judge, while agreeing that the claim was frivolous, stated that nevertheless the man held a policy from the company in which it had warranted that the cigars were insurable, and also guaranteed that it would insure them against fire, without defining what it considered to be “unacceptable fire,” and was therefore obligated to pay the claim. Rather than endure a lengthy and costly appeal process the insurance company accepted the ruling and paid the man $15,000 for the rare cigars he lost in “the fires.”

After the man cashed the check, however, the company had him arrested on 24 counts of arson. With his insurance claim and using his testimony against him, the man was convicted of intentionally burning his insured property and sentenced to 24 months in jail and a $24,000 fine. Somewhere around Charlotte there’s most likely a recently fired underwriter, who’s looking for a job, and a claims manager who’s smiling over his recent promotion. As for the convicted arsonist, maybe he should quit smoking.