Why Would an Insurance Company Investigate a Claim? (2024)

Why Would an Insurance Company Investigate a Claim? The prospect of an investigator hired by the insurance company following you around and looking into your life is not a myth, nor is it a scare tactic used by lawyers to get you to hire them. Insurance companies do investigate claimants. Doing or saying the wrong thing really can cost you money. Insurance companies commonly use surveillance. Prepare for them to use it in your case, especially if you allege severe injuries.

Insurance Companies May Hire People to Follow You

Why Would an Insurance Company Investigate a Claim? (1)Insurance companies send investigators to different cases. They can contract with private investigators or hire their own. Regardless of who they use, their goal is the same; to try to catch you in the act of doing something that they can use to reduce your financial recovery. We have known these companies to do or say anything that they have to pay as little as possible. In some cases, they go after the claimant themselves, either by undercutting their credibility or disputing their damages. Insurance companies are also concerned about potential insurance fraud. While most personal injury claimants are accident victims who need the money, insurance fraud does take place. Accordingly, insurance companies feel the need to further investigate some claims because they suspect fraud. There can be specific reasons why they have honed in on you.

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Insurance Companies Devote Time and Resources to Surveillance

Insurance companies will spend thousands of dollars to tail claimants for as long as a week. This surveillance can be around-the-clock, just like in the movies. Cars can be parked outside your home out of view or follow you as soon as you leave your home. These investigators are good at what they do, so you will probably not outwit them. Insurance companies can follow you at any point during your claim. If your case drags on for a year or two, their investigators may watch you at any time. Although they will not follow you the whole time, you should always act as if they are watching you because they can follow you at any time.

Insurance Companies May Use Surveillance in Personal Injury Claims

Most often, insurance companies will order surveillance in disability claims when the basis of your case is that you can no longer work. However, a personal injury claim can pay you for your inability to work. If you are early in your career or have a high-paying job, these damages can be the bulk of your claim. The insurance company investigators are not amateurs by any means. They are private investigators with experience who know what they are doing. These people have expensive and sophisticated spy gear that they are using on you. Again, it is entirely legal for insurance companies to surveil you. How far they can go depends on state law.

Tactics that Insurance Companies Use to Get Information

Insurance investigators will watch you. They will look through whatever parts of your social media that they can access to get an idea of the life that you are living when you file the claim. They are not beneath hiring someone to physically follow you during your claim to see what you are doing. Their only limit is that they cannot enter or look into your home. Other than that, everything else is fair game. These investigators will undoubtedly perform a Google search on you. They can see the publicly available information that anyone can view, including news articles and comments that you may leave in chat groups and forums like Reddit. While there are rules about what these investigators can and cannot do, you should not expect that they will follow them. Some unscrupulous investigators have used shady and dishonest tactics to discredit your claim, seeking to impress their insurance company bosses. No matter how they obtained the information, you can count on the insurance company being more than happy to use it against you if it can save them money. Even if a state limits insurance company surveillance under anti-stalking laws, there are still plenty of things that investigators can do to find information. Following you is just one of the many things that insurance companies can do.

Insurance Companies Can Use Surveillance to Undercut Your Damages

Once you have proven your entitlement to damages, you will begin trying to negotiate a settlement agreement. When you file a claim, you have also outlined the damages you have suffered in the hopes that you will obtain compensation for them. Before they write you a check, the insurance company wants to ensure that you have suffered these damages. They may be looking for nuggets that they can use against you, especially if your case goes to court. Insurance companies are more likely to investigate you when you file a large claim. Any large check that they write comes out of their profits. Therefore, they are looking for any way to escape paying for the damages their policyholder caused.

How Insurance Companies Use Information that They Gathered Against You

The insurance company wants to disprove:

Your lost wages depend on showing that you are either unable to work or can do less work than you did in the past. In a hypothetical case, when someone claims that they cannot perform the physical duties of their job, it does not look good when there is evidence of them out riding a bike or doing something physical in public. The insurance company is trying to prove that you can do your job or take another position to pay you some money. Even if an insurance company does not have enough to physically disprove your claim, they may get something that strengthens their bargaining position. Settlement negotiation is very similar to any other type of negotiation - information is power, and those who have it are in a stronger position. In the insurance company's estimation, they can scare you by claiming to have some evidence that they can use if your case goes further. When you seek pain and suffering, you claim that your life has changed for the worse since the accident. One central element of pain and suffering is the loss of enjoyment of life. You seek compensation because you cannot do things you did before the accident. Your pain and suffering claim may also say that you deal with intense physical or emotional pain. Pain and suffering are often the most significant parts of your damages. The insurance company wants to do anything possible to undercut this part of your claim, trying to find something inconsistent with what you have put on paper. If they can show that you are in better shape than you claim, the insurance company can reduce your damages.

Insurance Companies Take Snippets of Information Out of Context

All it takes is one glimmer or piece of information for the insurance company to cherry-pick for them to reduce your settlement offer. Although they do not have the final say over the amount of money you get, they can present this evidence in court if you file a lawsuit. Inconsistent information can undercut your credibility, and the insurance company will not hesitate to use it as leverage against you. While insurance investigators are usually more common in other cases (such as long-term disability insurance claims), do not assume that the insurance company will not investigate your claim. In fact, you should act like the insurance company is watching you while your claim or lawsuit is pending, even if they are not. The last thing that you want to do is give them ammunition to deny your claim or try to reduce your damages.

Be Very Careful When You File a Claim

With that in mind:

  • Set all your social media accounts to private to keep those who are not your friends from seeing your posts (if that is possible)
  • Do not post anything about your physical condition.
  • Do not post any pictures that show you performing any physical activity.
  • Be very careful about what you do outside your home.
  • Do not speak to anyone about your accident, especially those who you do not know.

You Can Dispute the Information They are Using Against You

Even if the insurance company obtains the information that can undercut your claim, you still have the right to tell your side of the story to the court. Insurance companies are known for cherry-picking favorable evidence and taking small snippets out of context to make you look bad. You can tell the court the entire story and show why the small slice that the insurance company has played does not accurately capture reality. In addition, you can present medical evidence that reinforces what you have alleged in your personal injury claim. A jury will decide how much compensation you are due if you cannot agree on a settlement with the insurance company. While the insurance company may present evidence, they do not get the final word over your financial compensation. Personal injury claimants may have good days and bad days, and the insurance company will try to argue that the good days are your entire life. However, never give the insurance company reason to make your life more difficult when seeking financial compensation from them. Whenever you deal with an insurance company, exercise a healthy degree of caution, knowing their motivations. You are not being paranoid if you act like an investigator is following you. You are simply being smart. Assuming that everything you have included in your claim is true and correct, you should have nothing to worry about. Nevertheless, do not make your life any harder when filing a claim and seeking compensation.

Always Get Legal Help When You File an Insurance Claim

You should always hire a personal injury lawyer for your claim. They will advise you about what you should and should not do while your claim is pending. If the insurance company is trying to strong-arm you with some information that they claim to have, your attorney will know how to deal with them. While you can try to negotiate with the insurance company on your own, it is always a bad idea. Your attorney has the benefit of experience dealing with the insurance company. Your lawyer may also challenge the evidence that the insurance company has gathered if your case goes to court when the insurance company’s investigator has gone too far. Some of these investigators break the rules through their overzealousness and their attempts to please the insurance company that pays them. In that case, you can try to have the evidence thrown out if your case goes to court. In the end, insurance companies chase figurative waterfalls most of the time, as most of their surveillance efforts fail to discover anything that they can use against a claimant. Many claimants have become aware that an investigator may follow them, and they are cautious while their claim is pending. However, when the insurance company does turn up damaging evidence, it helps them pay for all the surveillance because they can cut financial compensation if they successfully use what they find.

Why Would an Insurance Company Investigate a Claim? (2)

David Abels

Partner

David Abels has carved a niche for himself in the personal injury law sector, dedicating a substantial part of his career since 1997 to representing victims of various accidents. With a law practice that spans over two decades, his expertise has been consistently recognized within the legal community.

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Why Would an Insurance Company Investigate a Claim? (2024)

FAQs

Why Would an Insurance Company Investigate a Claim? ›

Why do they go through all this trouble? The answer is simple – insurance companies aim to strike a delicate balance. They want to provide the injured party with just compensation, but they also want to avoid overpaying.

What triggers an insurance investigation? ›

Insurance companies are more likely to investigate you when you file a large claim. Any large check that they write comes out of their profits. Therefore, they are looking for any way to escape paying for the damages their policyholder caused.

What does it mean when your insurance claim is under investigation? ›

There are several reasons why an investigator may want to discuss your claim: Routine Procedure: Insurance companies often conduct routine checks to verify the details of claims. This helps them ensure that claims are legitimate and comply with their policies.

What is the most important aspect of a claims investigation? ›

Comprehensive Assessment: Investigators assess various aspects of an insurance claim, including the cause of damage, policy coverage, and the extent of loss. They aim to provide a comprehensive evaluation of the claim's accuracy.

What is the first thing an insurer must investigate before taking on a claim? ›

Investigate all grounds for coverage

The insurance company must investigate all possible grounds for coverage. In order to perform a reasonable and proper investigation, insurance companies must also investigate all bases for the insured's claim.

What is the primary purpose of a claim investigation? ›

The primary purpose of a claim investigation is to evaluate the legitimacy of an insurance claim by gathering evidence, conducting interviews, and reviewing records to determine whether the claim is legitimate or fraudulent.

What is the final step in a claim investigation? ›

At the end of the investigation, an insurer can either reject or accept the insurance claim. Then, an insurance adjuster tables the initial settlement amount.

Are insurance investigations discoverable? ›

If an insurance investigation is done in anticipation of litigation, then that investigation file is protected from discovery by the opposing party.

What does investigate the claim mean? ›

(ɪnvestɪgeɪt ) verb B2. If someone, especially an official, investigates an event, situation, or claim, they try to find out what happened or what is the truth.

How far should the insurer go in its investigation of claims? ›

First, when you report the accident to the at-fault party's insurer, they will have 15 days to acknowledge your claim against their policyholder. After that, they have 15 days to conduct their investigation. The insurance claim investigation duration should not exceed 40 days.

What makes a strong claim statement? ›

To be strong and effective, a claim should be debatable, focused, and specific. In other words, it ought to be something that can be argued with reasons and evidence, and it ought to be narrow enough to properly support or prove in the space and format available.

Why do we investigate claims? ›

They are determined to gauge the extent of the damage and determine a fair and accurate settlement. From medical expenses to property damage, every aspect of the claim is subject to scrutiny. If you're claiming a shoulder injury, get ready for the insurance company's eagle-eyed assessment of your total medical costs.

What is the first key to successful claims processing? ›

Patient Registration. It all begins with the initial patient check-in and collection of personal and insurance details. Accurate and complete information is a claims processing best practice. Registration information includes demographics, name, policy type, policy number, and group number.

What is the first stage of an accident investigation? ›

The first step in the investigation is to secure the incident scene and preserve any physical evidence using cones or other barriers to protect sensitive areas. If the investigation team has to travel a long distance to reach the scene, on-site management should be instructed to carry out this step.

How long does an insurance company have to investigate a claim in the UK? ›

The other party (or their insurer) has 21 days to acknowledge your Letter of Claim, and then they have three more months to investigate your claim. After that, they'll either accept liability for your injuries – or deny responsibility.

What is the last step in the claim settlement process? ›

The final stage of the Insurance settlement process is the resolution and payment. Based on the assessment, the insurance company will decide to approve or deny the claim.

What triggers an insurance audit? ›

Outlier payments and higher-than-average use of procedures are likely the most common audit triggers.

What is one of the most common reasons for a claim being rejected by an insurance company? ›

Process Errors
  • The claim has missing or incorrect information. Whether by accident or intentionally, medical billing and coding errors are common reasons that claims are rejected or denied. ...
  • The claim was not filed in a timely manner. ...
  • Failure to respond to communication. ...
  • Policy cancelled for lack of premium payment.

How do insurance companies screen for suspicious activity? ›

SARs are used to prevent and report the activities that seem to be related to money laundering. These reports can generate leads for law enforcement agencies. The insurance broker notifies the insurance carrier when suspicious activity occurs. Insurance carriers file SARs with FinCEN.

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