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Q&A: The Insurance Investigation

Posted on: December 2, 2022

LEGALLY REVIEWED BY:
Chi Hung Nguyen
December 2, 2022

the terms and conditions of an insurance policy go hand in hand with insurance investigations

Somebody somewhere always wants more investigation. An insurance investigation is when the insurance company collects and examines all of the documents and reports, witness statements, photo and video evidence and more in order to make a decision about an insurance claim. There are many types of damages. The insurance claim can be for bodily injuries like a broken arm, or property damage like damages to your car after a car accident or truck accident.  

Does the insurance agent conduct the entire insurance investigation? 

No, the investigation is not conducted by the insurance agent. The insurance agent start to do some fact-finding about liability in an accident. This can include getting a copy of the police report, interviewing all the drivers and witnesses, collecting repair estimates to any damaged cars and property and more.  

But insurance agent does not actually handle the investigation involving legal matters, like whether or not the insurance policy covers a particular claim. This is because agent owes fiduciary duties to both the insurance company and the person who has insurance. Fiduciary duties are legal duties imposed by the law to force someone to put another’s interests first. They are also not trained in the legal theories or laws, so this means they cannot make the final call when it involves legal questions. The insurance agent must refer the claim to the insurance company’s claims department or he breaches the fiduciary duties owed.  

The geographic location of loss is important in deciding whether the claim investigation is assigned to a local office, or if it will be reassigned, even if just a part. For example, if a accident happens hundreds of miles away, they may find an office closer to the accident scene to handle collecting evidence like the police report and witness statements. 

How long is an insurance investigation? 

Even after you give the insurance company everything they ask for from the beginning, the insurance company can request more documents or information before making its decision. This can take weeks, or even several months. The actual investigation and claim can go from one insurance company employee to another as it is processed between departments and different levels.  

While insurance companies cannot too much time, they are not interested in rushing to help process each insurance claim. This is because an insurance company, like any other business, is seeking to make money. The more time it takes an insurance company to process and pay a claim, the more money an insurance company makes.  

Generally, the law does not let an insurance company hold off on a claim and has insurance companies process the claims they are not disputing or challenging within 30 days. This is why your personal injury attorney should date and place a deadline or time limit in the demand letter in order to force the insurance company to respond. A typical time limit is about 10 to 30 days. When there is a clear case, settlement should be an option with the ability to resolve it quickly over the phone and by processing the paperwork as soon as possible.  

Quick questions to ask before an insurance investigation  

When you are involved in a car accident or truck accident, you can ask yourself a few questions to understand which facts will be uncovered in an insurance investigation, and how they will affect your claim. These questions include: 

1. Was the auto policy valid for the date of the car accident or loss? This includes thinking about whether the insurance policy premiums were paid on time, or if the insurance policy ever cancelled. Sometimes, the terms of your insurance policy make it so that if you are in a car accident or experience a coverable loss, but the actual date it happens falls during a time your policy expires or is invalidated, then you cannot recover.  

2. Did I report the car accident and give notice about my claim to the insurance company on time? Some insurance companies will argue that if you take too long to report a claim or accident, they are put at a serious disadvantage and cannot properly investigate – often called prejudiced – resulting in the rejection of your claim. This is because witnesses may not be able to be found after too much time has passed since the car accident, evidence disappears because no one protected or preserved it and more.  

3. Did the at-fault driver or any other drivers have valid insurance? Did they have an excess or umbrella insurance provider? If another insurance company is going to be involved in making payments, the insurance company will determine whether the responsibility to pay a claim and restore a party is shared between multiple insurance companies. There can be multiple auto policies that apply to one vehicle. Identifying how many insurance companies and policies come into play helps identify how much money you can recover, how long the case will take and which insurance companies should be held responsible and for how much.

4. Were the other driver(s) in their own car(s), or using someone else’s vehicle and covered under their insurance policy?

For example, if a driver is involved in a car accident but does not own the car, he or she may still be covered under the insurance policy as a permissive user (someone who was allowed to use the vehicle and covered by the insurance provider even though the policy belongs to someone else). On the other hand, someone who stole a car then was involved in an accident may affect third-party claims made but not first-party claims. Another example is when someone with insurance tries to collect a damage award for a vehicle that does not belong to him.  

5. Where did the car accident, or loss, happen? Some insurance policies fail to identify the locations covered under the insurance policy. When the designated locations in an insurance policy are unclear, the insurance investigation should find out which locations were intended to be covered. The insurance provider has to consider the communications with their insured client, look at their requests, review the underwriting file and insurance file history to see what all of the parties to the insurance policy intended. If the person with insurance and the insurance provider disagree about the amount of coverage intended under the policy, the court can step in and help decide what the terms mean as a contract.

6. Is there evidence that your car was struck on purpose? If the driver with insurance intentionally struck your car for some reason, it can affect the amount of coverage when comparing first-party, or third-party coverage. For example, the terms of the insurance policy might say that the insured driver that caused the accident will not be covered if he struck another person’s vehicle on purpose and suspend his insurance coverage in the future.  

7. Was the driver who had insurance found guilty of driving under the influence (DUI)? Many states penalize drunk driving and being intoxicated. Multiple states hold DUI drivers responsible for paying for certain case fees, or increased award amounts when their drunk driving hurts others by putting society in danger. 

There are many questions that need to be asked as part of the insurance investigation. These are just a few to get started thinking about the various moving parts that each play an important and unique role in an insurance investigation.  

Insurance investigations can lead to bad faith 

It would be inaccurate to assume insurance companies always act in bad faith, which refers to when an insurance company wrongfully denies a claim. Sometimes, the insurance claims process just takes time. There are plenty of valid reasons for an insurance company to take its time when it is evaluating a case, such as when it does not have all the documents or evidence needed in order to conduct a full investigation of a claim. But sometimes, large work loads or poor training cause insurance company employees to fail to act in good faith under the law.

Hire the right personal injury lawyers to ensure your insurance investigation is on track. Personal injury attorneys also conduct a liability investigation of their own, collect documents that affect the total damages claim and potential award such as medical bills, lost wages from being unable to work and any property damage such as damaged cars, and usually send a demand letter to the insurance company that needs to use this to begin settlement negotiations. 

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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