The goal of insurance is simple: to put your house or car back together after a claim as though nothing had ever happened. "Replacement Cost Coverage" and "of like kind and quality" are two common phrases in claims handling. Things are often paid for at the cost to replace them, and they are meant to be of the same quality as the thing damaged. Basically, your old beater car won't magically turn into a shiny Bentley after a claim. Well, one gentleman (and his mother) in Spokane decided to take Replacement Cost to a whole new level  - by way of fraud.

After a series of snowstorms in Eastern Washington, the patio cover at a home recently purchased by Mrs. S collapsed. The weight of the snow was just too much for the cover and it just fell apart. If you remember the Edmonds Marina after the winter snowstorms in 1996, you know exactly what I'm talking about. She filed a claim with Liberty Mutual to replace the broken cover. Her son told the adjusters that the cover was quite large, was the length of the patio and wrapped around the chimney. Oh, yes, and that estimates to replace it were between $195,586 and $213,815.

At this point, the claims handler thought something was up - or that the insured had quite the sense of humor. The adjusters then contacted the Office of the Insurance Commissioner to alert them to the possible fraud. Commissioner Mike Kriedler turned the case over to his Special Investigations Unit. When looking at online real estate sites, and learning of recent appraisals, the SIU team discovered that the son was looking for a mighty upgrade. Real estate websites (like Zillow and Redfin) revealed a much more modest patio cover. And a conversation with the previous owner (who installed the collapsed cover) confirmed that the cover had been canvas, but it was too much trouble to remove each year and a polycarbonate cover was purchased instead. For $300 - a far cry from the hundreds of thousands the insured's son was requesting. Even a real estate agent familiar with the home said that the patio cover in question wasn't anything special or significant.

 Armed with this information, the claims adjusters and fraud investigators contacted a Spokane-area builder to get some new estimates. With the measurements and photos of the actual patio structure in hand, he determined it would cost between $3,913 and $4,782 to replace the structure with something of "like kind and quality". The son of the insured, by the way, has now been convicted of insurance fraud and attempted theft for his actions. Lessons learned: honesty always wins, and patio covers don't cost nearly $200,000.