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Why Is My Insurance Claim Being Investigated?

Why Is My Insurance Claim Being Investigated?When your home is damaged due to a flood, fire, storm, or other natural disaster, you immediately think that because you have homeowner’s insurance, you are protected. While this should be true, you might run into some issues once you file the claim with your insurance company.

For example, you might receive notice that the insurance company has opened an investigation of your claim. It’s important to note that the investigation could have been opened as a mistake on the part of the insurance company or because you failed to provide all of the required information when filing the claim. It is not necessarily a bad thing, and your claim is not automatically denied because of an investigation.

However, there might also be a time where the insurance company is acting in bad faith in an attempt to get you to withdraw your claim. No matter the reason for the investigation, you should work with an experienced insurance disputes attorney to protect yourself.

Investigating a claim for your property

Imagine, if you will, that you have suffered losses in a house fire. When you file the claim, you will be required to provide the deed to the property, copies of your tax returns, pending contracts, and much more information.

After you have submitted the requested information, the insurance adjuster assigned to your claim will do a deep dive into your records and your past. The adjuster will look for the slightest hint of evidence that shows you might be lying or omitting information. Should the insurance company think that you are not providing all of the required information, you might be asked to complete an Examination Under Oath. If the adjuster discovers accidental or intentional wrongdoing related to your claim, the insurance company might attempt to deny the claim.

Every insurance company defines “wrongdoing” differently, which means your case might wind up being handled differently than someone else who has had a claim denied for this reason. Some insurance companies view wrongdoing as omitting a claim for any type of reason in all the years you have had insurance coverage. So if you were in a car crash 15 years ago and don’t mention that claim in your paperwork, because you forgot all about it and it’s not a top priority when your house burns down, the insurance company might still view this as wrongdoing.

What other information is requested by an insurance company when filing a claim?

Most insurance companies will require property owners to file a comprehensive list of all the items that were in the home when the fire occurred. The list should include the quantity of items, value, cost, and dollar value of loss you are claiming. Proof of loss will also be requested by most insurance companies. This can be provided by supplying photos of items you owned, copies of receipts, or other records you have that survived the fire.

The adjuster assigned to the claim will examine the damages to the home caused by the fire. This helps determine whether or not the insurance company will pay for the losses you incurred. For this reason alone, you need to have excellent documentation for the items you own. If the adjuster believes you are lying about what you own, or there are gaps in your records, they might believe you are trying to be compensated for more than what you really had and will likely deny the claim.

What is the adjuster looking for in my documents?

When the adjuster opens an investigation into your claim, they will be looking for anything that could constitute fraud on your part, including the following:

  • An increase in the amount your home is insured immediately prior to the fire
  • A handwritten receipt for a repair completed in the home
  • A lack of an official report following the fire
  • Having significant financial debt to the name of the claimant

The adjuster will also review your claims history. Doing so helps them determine how many prior claims you have for the home, how often you file claims, and the nature of those claims. All of these items will weigh heavily in the decision of the insurance company to either approve or deny your claim for the house fire.

What is the cooperation clause, and can it lead to my claim being denied?

The cooperation clause basically requires the insured to cooperate with an insurance investigation in order to receive compensation for your claim. Should you fail to cooperate with the investigation, the insurance company could conceivably use the cooperation clause to deny your claim. On the other side of things, insurance companies might use this loophole to request the insured to jump through dozens of hoops in order to receive compensation, making it nearly impossible to do so.

Is a low offer the sign of a bad faith claim?

If the insurance company makes an unreasonably low offer, it could be considered a bad faith claim. The law requires insurance companies to handle claims made by their customers fairly and reasonably. You should consult with an experienced insurance dispute attorney if your insurance company has made a low-ball offer during the settlement process.

You might have options when it comes to your insurance dispute. We can talk to you about those options, and help you plan a course for the future. Call the Warhurst Warriors of Warhurst Law at 251-207-1296, or complete a contact form. We understand the arbitration and litigation processes. Serving Alabama, Florida, Louisiana, and the entire Southeast.