Your plans may go up in smoke, too...

Newcastle's West End - three-and-a-half square miles of terraced houses, back lanes and brickyards - is the arson capital of Europe. Eight out of 10 fires put out by the local brigade have been started deliberately.

Detective Martyn Campbell, part of the area's arson task force, says: "The UK has the highest rate of arson in Europe and the West End of Newcastle has the highest rate in the UK. There's a very high unemployment rate, a lot of run-down estates, and very few private houses."

The local fire brigade reports about 600 malicious fires in the area each year - about two a day. For them, arson accounts for 83 per cent of call-outs, against 50 per cent for the UK as a whole.

Detective Campbell says: "We've arrested drug gangs who've petrol-bombed one another's property, we've had jilted boyfriends setting fire to the new boyfriend's car. We've had a mother with a young daughter who had petrol poured through their letter box and ignited at four o'clock in the morning.

"You can pick up a three-bedroom flat for pounds 1,500 in this area, so there's a real incentive for landlords in negative equity to set fire to the premises for the insurance money. We've had a couple of those. But the majority are 10- to 16-year-olds getting into empty premises and setting fire to them."

Newcastle's problems may be unique, but arson is a growing problem throughout the UK. Home Office figures record 90,500 malicious fires in 1996, a jump of 7 per cent on the previous year. This total includes 37,500 buildings deliberately set alight - about one in three of all the building fires reported - and 45,000 cars and other vehicles - just over half of all road vehicle fires. In 1996, 136 people died as a result of arson and another 3,284 were seriously injured.

British insurers currently pay out arson claims at the rate of pounds 1m a day. Tony Baker, of the industry's Arson Prevention Bureau, says that adding in the incidental costs involved, such as interruption to work, brings the total cost closer to twice that.

As far as insurers are concerned, arson claims are treated like any other fire claims - unless they believe the owner of the house or car involved set the fire. All fires which cause damage worth more than a couple of thousand pounds will trigger a visit from a specialist loss adjuster, who will give his view on how the fire started.

If there are reasons for suspicion, a private forensic lab will be called in. About one in five arson fires turn out to have been set by the owner as an attempt at insurance fraud.

Often, the clue lies less in the fire damage itself than in what was lost. Cornhill deputy claims manager Harry Rule says: "If you look at the statistics of vehicles stolen, it's this year's and last year's that top the league. It tails off as you go back through six-, seven-, eight- year-old vehicles.

"And then you find that nine- and 10-year-old vehicles are stolen more often and invariably found burnt out. I'm afraid you do get the rather curious idea in your head that here is a policyholder whose car has reached the end of the road."

Joyriding is another common cause of car fires. Mr Baker says: "What does a bored 10- to 14-year-old do of an evening when they want to have bit of fun? They pinch a car, race it around, and set it on fire. There are people who like to watch fires, and setting fire to a vehicle is just fun to them."

On the commercial side, insurers often find that warehouse fires involve the loss of stock which is no longer fashionable, or cannot be sold for some other reason. This might mean, for example, a January fire which happens to dispose of a huge pile of last year's calendars.

Domestic arson too, is often easy to detect. Neil Kelly of loss adjusters Crawford THG says: "You do get the professional touch, but you also get some fairly inept things. People get caught out when they want the fire to spread. They lay a trail of combustible material where they want the fire to run along. We open up the premises later and, lo and behold, it's still there."

The hope of a hefty insurance payout is not the driving force for all arsonists who set fire to their own homes. One 19-year-old man made such a mess of the DIY work on his flat that he persuaded a friend to help him set fire to the place so the council would rehouse him. In fact, the council rehoused both of them - behind bars.

What can you do?

Insurers do not add a sum to your premiums specifically to cover arson, but lump the risk in with all other damage, which means you pay for other people's crimes.

Tony Baker of the industry's Arson Prevention Bureau says the best thing worried policyholders can do to guard against the risk is improve the general security of their home. This means maintaining external fences, fitting approved door and window locks and considering security lighting outside. "Most people are really surprised when you tell them the extent of arson and the cost in lives and injuries," he says.

"But, once you are alerted to it, there are basic things you can do. Keep gaps under doors as narrow as possible to stop lighted paper being pushed under them. If you've got a letterbox, put a metal container on the inside to contain any fire from lighted rags or paper pushed through the box."