A Charlotte, North Carolina, 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 and
without even having made his first premium payment on the policy, the
man filed a claim against the insurance company. In his claim, the man
stated 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, agreeing that
the claim was frivolous, stated nevertheless that 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 against fire,
without defining what it considered to be "unacceptable fire," and was
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 own
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.