Investigating a Theft Loss: Can It Be Bad Faith Right from the Start?
All insurance companies investigate a loss due to theft. As consumers, we expect it and cooperate as best we can. However, when does an insurance company's investigation go too far and start to become bad faith?
A policyholder had his car stolen. It was eventually recovered, but had been in an accident. The policyholder, who didn't have rental insurance, just wanted his car fixed or declared a total loss so that he could stop paying for the rental. He cooperated with his insurer, but couldn't seem to get any answers.
Instead, they began asking him for personal information – very personal information – such as credit card statements, mortgage information, cell phone records and proof of income. This begs the question…
How much information do you have to give your insurer?
According to Bob Scott, an attorney with The Advocate Law Group, "An insurance company owes its policyholders a duty of good faith and there can be serious consequences to the company for failure to act in good faith. As far as how much personal information you have to give the insurance company – you have a duty to cooperate with them reasonably and in good faith. Exactly what that means can vary all over the lot, but failure to cooperate is a basis for them to deny your claim."
In this case, the policyholder's insurer is likely investigating whether or not he was involved in the theft. However, we wonder what mortgage statements, credit card receipts and proof of income have to do with the matter. According to Scott, "This seems like bad faith right from the start. I cannot recall this type of aggressive claim response to a car theft. It is really outrageous."
When is it time to turn up the heat?
There comes a time in any claims process when you must turn up the heat to get the claim resolved – especially when you're being asked for very personal information. Scott continued, "When the process starts to go downhill, we suggest that policyholders stop dealing exclusively over the phone and start requesting written confirmation of any of the insurer's requests. Policyholders can also send letters to their adjusters and the President of the insurance company complaining about the delay. Phone calls often get ignored; letters are more likely to get attention. As always, you should be polite, persistent, but firm."
When to contact an attorney
There comes a time when you simply just can't get anywhere with your insurer. When that time comes, consider contacting an attorney whose practice focuses on insurance matters to advocate on your behalf. According to Scott, "If you should in ANY way be concerned that you might have something to worry about in terms of the claim – contact a lawyer as soon as possible. Indeed, if you have reason to believe that the insurance company is NOT acting in good faith, that's when you should speak to a lawyer immediately!"
If your insurance company is acting in bad faith, or you simply can't get them to act, contact an attorney who can help you. To contact an insurance bad faith attorney, click here.