What If My Insurance Company Fails to Conduct a Prompt Investigation?
If you have filed an insurance claim, the insurance company is supposed to launch an insurance claim investigation to evaluate the merit of your claim. This investigation is necessary to gather evidence and evaluate your situation so a payout can be made.
An investigation will generally involve the insurer sending out a licensed adjuster to take a look at the damages related to your claim. In most cases, investigations are time-sensitive. The damage from a storm or car accident, for example, will not be present permanently, and if your vehicle was damaged, you would want to get it repaired as soon as possible. If an insurer fails to launch an investigation in a reasonable time, your claim may be affected.
What is a Bad Faith Investigation?
The most important thing to understand is that insurance companies are not in the business of paying claims — they are in the business of making money. That means the more claims they deny, the more profit they have to give to their shareholders. Some insurance companies, including some of the largest insurance companies, will often engage in bad faith, or even sometimes illegal, actions during claims investigations processes to deny policyholders the damages they are due.
When you file an insurance claim because of a car accident, damage to your property or because you are injured in some way, your insurance company has a duty to investigate to determine the merits of your claim. They must go through the insurance claims investigation process regardless of whether your car was damaged in an accident, you received faulty medical care or your home was damaged in a flood, because of a falling tree or some other cause. The idea behind the investigation is to compile evidence and determine if your claim is valid so that you can receive a payout.
A faulty or nonexistent investigation is just one way that insurance companies can act in bad faith. A failure to investigate your claim in a timely fashion after you have filed it or to use the investigation to neglect the insurance company’s responsibilities outlined in your policy is also considered an act of bad faith or a breach of their obligations. Insurance companies are also not allowed to use an investigation only to determine ways they can deny your claim. Insurance companies are supposed to evaluate claims from both their viewpoint and the insured’s viewpoint.
Insurance companies must, by law:
- Consider your interests as much as it considers its own interests in the investigation.
- Totally investigate your claim, including all possible sources that would support your claim.
- The insurance company needs to consider or try to find evidence that pertains to liability and any possible damages.
- An insurance company cannot deny you a payment in good faith until they have thoroughly investigated the reasons for their denial.
- In the case of a medical claim, the insurance company cannot ignore a doctor’s diagnosis without an adequate attempt to investigate the diagnoses from a medical perspective.
- Sometimes insurance companies will delay an investigation when they know they will be responsible for a particularly large payout. In the case of someone making a homeowners’ claim, insurance investigators who conduct investigations will only look at the areas which the homeowners pointed out to them and not thoroughly investigate the entire situation.
When some insurance companies investigate claims, they may send out unlicensed or third-party adjusters who work for a variety of companies. Some insurers hire adjusters who do not fully investigate all relevant facts of a claim.
How Long Can an Insurance Company Take to Investigate a Claim?
In Pennsylvania, after you file an insurance claim, the company has 30 days to investigate that claim or to deny or accept your claim. If there is a reasonable cause that the insurance company cannot complete its investigation within those 30 days, at the end of 30 days, they must provide you with a “reasonable written explanation” as to why the investigation has been delayed. If the delay continues, they must write you a similar explanation every 45 days explaining the cause for the delay, and let you know when you can expect a decision.
Not Every Delay Is the Result of a Bad Faith Investigation
If the insurance company’s investigation into your claim stretches beyond the 30-day limit, it does not always constitute an act of bad faith. Sometimes legitimate delays happen – it may take a while to gather medical reports or interview witnesses. Bad faith requires a deliberate intent by the insurance company to evade the responsibility of paying you the damages you are due. It is your responsibility to prove that the insurance company acted in bad faith.
If you believe you have a straightforward claim and that the insurance company is delaying the investigation longer than the 30-day limit so it will not have to pay you damages, you should contact an attorney immediately. If the insurance company is acting in bad faith, Pennsylvania law provides for quite severe penalties if it can be proven.
What If I Do Not Have Evidence of My Insurance Company Failing to Conduct a Proper Investigation?
It is undoubtedly much harder to prove that an insurance company conducted a bad faith investigation without proof or evidence. Whether a judge would believe you if you went to trial in such a circumstance often depends upon the judge. If you and your attorney can make a legitimate argument that, even without evidence, the circumstances of your case show that the insurance company engaged in bad faith, it may be possible to prove it. In many other cases, however, it is likely that the judge will deny you any restitution if you lack evidence.
Therefore it is incumbent upon you from the very beginning to compile as much evidence as possible to prove that the company acted in bad faith.
These are the steps you can take to ensure you have the necessary evidence.
1. File Your Claim as Soon as Possible
Regardless of the nature of your claim, you should report it as soon as possible. The longer you delay, the more likely it is that the insurance company will use it as a reason to deny your claim. For instance, if you are in a car accident, try to see a doctor immediately or as soon as possible after the accident. Make sure you tell all the health professionals you see that you were in a car accident. An injury suffered in a car accident sometimes does not manifest itself until several days after the accident. It is best to see a physician immediately because then the insurance company cannot argue that you were just pretending to be hurt.
Also, make sure your insurance company has your correct contact information. If you have not updated your address with them after a move, the insurance company adjuster can claim that they tried to let you know about their investigation but were unable to reach you.
2. Keep a Copy of Important Medical Records, Documents or an Inventory of All the Items in Your Home
Documentation is extremely important in any form of a claim. If you know that you have a solid insurance claim, documentation will help you improve this point in a trial if the insurance company either fails to investigate your claim properly or denies your claim before it investigates.
3. Make Sure You Cooperate With Any Investigation
While the insurance company has obligations to you as the insured party, you also have obligations to the insurance company. One of those obligations is to cooperate as much as possible in its investigation. If you do not cooperate, the insurance company can deny your claim even if it did not conduct a complete investigation.
Try to cooperate as much as you can, even if the investigation seems a little broad at times. If you feel, however, that the insurance company’s investigation is not reasonable or relevant, contact an attorney immediately.
4. Protect Your Rights
If an insurance adjuster arrives to investigate your claim, get a name, license number and business card in case there is any question about the adjuster’s findings. It is a good idea to get the name and identifying information for anyone at your insurance company you speak to. Be sure to note when your insurance adjuster arrives and how long they investigate. Always take your own photos and gather your own documentation as well, just in case.
5. Report the Delay to the Insurance Company
If you feel that the adjuster assigned your case is not conducting a proper investigation, after 30 days, you should contact the company’s internal dispute resolution section. You should let them know that you wish to dispute the delay and that you want them to respond in writing. Include a short timeline of all the contact you had with the adjuster and let them know you provided all the information that was requested. This is why you must always try to respond promptly to any reasonable requests for information.
6. Hire a Public Adjuster to Investigate Your Case
If you do not believe that the adjuster used by the insurance company has conducted a complete and thorough investigation, and as a result insurance company has denied your claim, you can hire a public adjuster to investigate your claim for you properly. If the insurance company refuses to settle or continues to deny your claim, you can introduce the findings of the public adjuster at a trial. Your attorney will have the names or contact information for public adjusters in your community.
How Do I Know If There Was a Full Investigation?
If an insurance adjuster is operating correctly, they will contact you as soon as possible after you have filed your claim.
- They will ask you for all documentation and information on the incident that led to the claim.
- The insurance adjuster will set up a time to talk with you about the incident. You should always try to make sure this takes place at a neutral location unless the investigation involves a claim on a homeowners’ policy when the adjuster will need to see the damage firsthand.
- They will ask for permission to talk to your friends or family who may have seen the incident or who can speak to the results of the incident. For instance, family members may be able to provide statements about how you have been affected physically since the incident or witnesses may have seen the incident or, in the case of damage to homeowners’ property, have seen the immediate aftermath in person.
- The insurance adjuster may also ask for access to any social media sites you use regularly. Therefore it is important to never talk about your accident online or to give any details of your case. Insurance companies can sometimes use this to undermine your original claim.
If the adjuster assigned by the insurance company fails to act in any of the above ways, you can be legitimately concerned that they are not conducting a thorough investigation. Or if the insurance adjuster seems to be dragging out the investigation, such as waiting two or three weeks to talk to you about what happened or to make any attempt to see any damage caused to your car or your home, these are certainly signs that the insurance company is not conducting a complete investigation.
Make sure you thoroughly document any contact you have with the insurance agent, recording the time and the dates you spoke to them, and any requests they made for information, documentation or to conduct an interview.
Are There Guidelines That Specifically Apply to Insurance Companies to Know How They Should Conduct Investigations?
The Unfair Insurance Practices section of the Insurance Company Laws of Pennsylvania (Chapter 146) delineates the procedures that the insurance company must follow in terms of investigating a claim. This section does not specifically detail what an insurance company needs to do step-by-step as each company may have its particular way of investigating a claim. However, it does outline what an insurance company is required to do by law, such as complete the investigation within 30 days or notify the insured party in writing of the reasons why the investigation has been delayed.
Does Every Claim Need an Investigation?
In most cases, yes. There may be the occasional case where the facts are so obvious that the insurance company will prepare the payout immediately, but these cases are few and far between. Insurance companies are constantly on the outlook for fraud. Not many insurance companies will pay out on a policy solely based on the word of the policyholder. They will want to investigate to see if the policyholder has a legitimate claim.
In fact, one of the signs that you do have a legitimate claim is the insurance company failing to conduct a proper investigation. As we noted above, the insurance company is not in the business to pay out claims but to make money. If you file a claim and the insurance company conducts an incomplete investigation or drags its feet on the investigation, this is a sign that they may be looking for a way to deny your claim.
Get the Help You Deserve
If you feel the insurance company is not adequately investigating your claim, you need to act quickly. Contact an insurance attorney, such as KBG Injury Law.
An insurance attorney can gather evidence for you or can even use their network to find insurance investigators who work on behalf of policyholders. Working with an attorney through the claims investigation process can help you establish evidence of your claim and can ensure your claim is not denied due to an inadequate investigation.
An insurance attorney can also help you address any issues if your insurance company is acting in bad faith. Contact KBG Injury Law today for a free consultation if you are having any issues with your insurance company. You can also call us at (800) 509-1011 or visit our contact us page where you can leave us your information and some details on your claim. A member of our team will get back to you as soon as possible.