The Insurance Council says some Christchurch property owners have set fires in their homes to claim insurance and warns of devastating consequences if fraud is proven.
Chief executive Chris Ryan says such cases are not common, though the Fire Service has seen an increase in arsons in recent months.
Chris Ryan says if fraud is proved, homeowners can lose their cover on anything else they have insured.
"That of course has quite a devastating effect on people, whether they need to borrow money to buy a car or get a mortgage and in a whole range of other business environments."
He said some people appear to have made the serious mistake of trying to destroy their property by fire, but it is not widespread.