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Collecting Evidence Against Insurance Companies

Posted on: February 2, 2023

Chi Hung Nguyen
February 2, 2023

Collecting Evidence Against Insurance Companies

collecting evidence against insurance companies can be complex and require legal expertise especially if there is bad faith

Insurance claims are filed by injured claimants after they suffer injuries and property damage from a car accident. Ideally, the insurance company pays for the damage to restore and compensate the injured claimant. In reality, it can be difficult to deal with insurance companies. Some insurance companies use a variety of tactics to delay or even wrongfully deny perfectly valid claims.


Our personal injury attorneys have experience in handling insurers and claims. Contact us today if you were hurt in an accident.


To support your claim with the insurance company, your attorney will collect important documents from various sources either through the legal discovery process, subpoena, Freedom of Information Act or open records requests as well as any other possible method. These documents and files can be used as evidence to support your claim. While the injured claimant and the claimant’s attorney know what happened, the insurance company needs proof before they will be willing to even consider paying a claim.


Beyond the accident in question, there is a lot of other information that can be sought by your lawyer to help build up your claim. Attorneys will consider what kind of evidence they need, and identify the best possible sources in order to get this information, including:


Collecting Evidence: Electronically Stored Claim Files

With the advance of technology, it is easy to forget that a lot of data and evidence is stored electronically. But it is financially and practically impossible for any company to store every piece of paper physically, and every document electronically, forever. Unless the law says otherwise, companies typically have a specific retention policy for how long they must hold on to electronic files and data. After that time period passes, the data can be deleted and disappear forever.


Whether an injured claimant is able to file a lawsuit, get an attorney and get all of this evidence before then is an entirely different matter. This is one of many reasons personal injury attorneys tell potential clients to seek legal representation as soon as possible. Cases need to built-up and it takes time to get all of the relevant evidence on time.


Beyond this, it is important to understand the insurance company’s internal policy for handling their electronic files. If the insurance claims representative does not receive a particular document, it is important to ask what the insurance company rules and procedures say to do in order to preserve or recover any lost files. It is also important to find out what the insurance company does with information that cannot be stored electronically or digitized properly, such as x-ray or MRI films, or lab samples.


Collecting Evidence: Insurance Employee Evaluations and Goals

Any insurance company with an employee that it fails to train and educate its employee may be held responsible for when that same employee acts wrongfully or makes an important mistake. Beyond any manuals that the insurance company may have, the job description of the employee’s role can show what exactly the employee is and is not supposed to do as part of his or her duties within the insurance company. The insurance company may set certain expectations or goals for a particular insurance representative last year, that were not met this year.


When an insurance company is suspected of acting in bad faith, it is important to get as much potentially relevant information as possible.

Collecting Evidence: Financial Reports

The Securities and Exchange Commission requires insurance companies to file a 10(k) report. This report shows how well-off an insurance company is, such as whether has enough funds in the right places so that it can cover all of its potential liabilities and financial obligations. The report tells you how healthy the insurance company is as a business.


In addition, every insurance company is required to file a report to the Department of Insurance every 90 days. The report tells the government how many assets, liabilities, and net worth of the insurance company. In other words, the report tells the government how financially stable the insurance company is, so that it can take in more underwriting business and insure others.


Why do these financial reports matter?

These financial reports are particularly important in bad faith cases. These reports matter because the lawsuit can demand anywhere from half a percent to one percent of the insurance company’s net worthy, which may be shown in the financial reports discussed above. This means that if the insurance company’s net worth is $1,000,000,000, then the person suffering from the bad faith of the insurance company can make $10 million dollars.


Generally, bad faith is when an insurance company wrongfully denies a claim. The obligation to act in good faith is implied in every insurance policy under the law. This means that even if an insurance company’s policy does not expressly state, or write-out in plain language, that its employees must act in good faith and give each claim proper consideration, it is still required.


When bad faith is particularly offensive, punitive damages may be awarded which means courts and juries are willing to award more money to a claimant who made a valid claim that was improperly considered by an insurance company. Punitive damages are usually added on top of the usual damages in a case. Usually, damages take the form of money awards to an injured claimant after a car accident for medical treatment, property damage to the car, etc. Punitive damages, on the other hand, are added on top of these damages for particularly bad misconduct, especially harmful behavior or to teach a lesson.


Insurance companies often do everything they can to try to stand in the way of providing documents that will expose their liability and responsibility in a particular matter. For example, in MacGregor Yacht Corp. v. State Compensation Ins. Fund, the entity that bought insurance, the insured, was a yacht company. The insurance company was State Compensation Insurance Fund.


Among other things, the insurance fund tried to argue that how it handled insurance claims, preserved documents and imposed restrictions on sharing those documents did not breach a duty of good faith and fair dealing with the insured yacht company. The important part of this case is that the insurance company it denied access to its claims file and documents because it was trying to protect the injured workers’ privacy rights.


The California court that presided over this case disagreed. In this case, the court said that the insurance company at least needed to treat the interest of the insured with the level of consideration that it would its own interests. In addition, the court said the insurance company did not even try to sort out its documents and separate the files it claimed would violate privacy rights from other documents that could have been provided in the course of the lawsuit. The insurance company wrongfully bundled both private and discoverable files together, and said they were all private, then used this excuse to deny access to all of the files. This was clearly a breach of implied-in-law covenant of good faith and fair dealing.


Another way insurance companies may try to hide information is by saying that their insurance company files and documents are privileged with the lawsuit. Insurance companies say that the files injured claimant’s seek are covered by attorney-client privilege. Attorney-client privilege is a legal privilege that protects the communications between an attorney and client, making them confidential. Confidential and privileged communications, like e-mails, letters and more cannot be used in the lawsuit as evidence. However, some insurance companies may try to take it a step too far. This is because attorney-client privilege are only privileged to the extent that it has to do with the attorney giving the insurance company and its employees or representatives legal advice. In other words, the insurance company cannot simply label a document privileged and refuse to produce it. The privilege has to be legitimately applied.


Even though the insurance company knows that they have a duty to act in good faith and consider each claim, the insurance company can still stand in the way of an injured claimant’s case by causing delay or refusing to provide documents.


Not all of the same laws, facts and methods apply the same way to each case. In fact, some claim denials are valid and some delays are reasonable, though frustrating. Understanding how to apply the laws, which standards insurance companies fail to meet and what evidence can be used requires legal expertise.


Find an experienced personal injury lawyer who can take on the insurance company on your behalf.


Contact an experienced personal injury lawyer


Without experience in the insurance industry or legal experience, understanding which factors or evidence can help or hurt your case can be difficult to understand.


Are you trying to secure your financial recovery with the help of experienced attorneys? If so, we can help.


The Pusch & Nguyen Law Firm has helped countless Texans handle their insurance disputes. Our experienced trial lawyers have gone up against some of the biggest names in the insurance industry while successfully bringing home payouts for clients. Our successful reputation speaks for itself, and with offices in both Houston and San Antonio, we are well equipped to assist Texans who are in dire need of our services. Register online for a free case evaluation or call us today at 713-524-8139 (Houston) or 210-702-3000 to schedule an appointment with a member of our team.


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