Short answer: Yes, insurance companies conduct extensive investigations to avoid paying large claims.
If someone else’s negligence injures you, you can try to recover damages. The first step usually involves filing a claim with the at-fault party’s insurance company. Once you file a claim, the insurance adjuster starts an investigation.
The adjuster’s fundamental goal is to decide whether you claimed a fair damage amount. Their second goal is to find evidence that they can use in negotiations.
While the insurance company investigates your claim, you may want to consider hiring a lawyer; the lawyer can arrange an independent investigation.
Why Would an Insurance Company Investigate a Claim?
Insurance companies investigate personal injury claims to avoid insurance fraud and find evidence that helps reduce settlement values.
Protection Against Insurance Fraud
Insurance fraud costs American consumers several billion dollars every year. When the insurance company fails to catch fraud on time, it hurts its bottom line.
Common types of personal injury insurance fraud include:
- Soft insurance fraud involves inflating a claim. For example, a victim suffers slight whiplash in a car accident but claims severe neck injuries and mental anguish. While it is legal to try and recover damages, when victims exaggerate them, they commit fraud.
- Hard insurance fraud involves inventing an incident specifically to file a claim. For example, a person intentionally falls on a supermarket floor and claims that they slipped on spilled milk. Then they try to recover damages for extensive injuries.
Insurance fraud can be a misdemeanor or a felony, depending on the state. Both charges come with significant penalties. Even if a criminal gets caught, the insurance company still suffers damages. To prevent fraud from happening, they conduct an investigation.
Evidence to Minimize Payout
The insurance company’s goal is to make a profit. When they have to pay large settlements, insurance companies lose money. Therefore, insurance investigators try to minimize payouts for personal injury claims.
Adjusters look for evidence to help them argue their case against the claimant or in court.
For example, during an investigation, the adjuster could find:
- An eyewitness who can testify that the at-fault party was not negligent; for example, someone who saw that a property owner warned the victim about the dangers of steep stairs
- Evidence that more than one party was in an incident; for example, evidence that a mechanic failed to repair a driver’s brakes could transfer part of the blame to the mechanic
- Pre-existing medical conditions that could cause victims’ symptoms, as opposed to being the consequence of the at-fault party’s negligence
Sometimes, insurance adjusters will even lie to collect evidence that helps them minimize the payout. To ensure you do not fall into that trap, avoid sharing any information with the insurance company until you speak to your personal injury lawyer.
Insurance companies investigate claims to minimize payments to the injured party. They will use all the information they collect during an investigation to negotiate a lower settlement or win the case in court.
How Do Insurance Companies Investigate Injury Claims?
When you file a personal injury claim with the at-fault party’s insurance company, that company assigns an insurance adjuster to that claim.
Assigning Insurance Adjusters
Insurance adjusters are professionals who handle the claim from the moment of filing until its resolution. They investigate the case, conduct negotiations, and decide on a fair settlement amount.
The adjusters are the leading investigators of your injury case. They know the ins and outs of insurance that help them make effective decisions. However, adjusters are very busy people. They can have dozens of claims sitting on their desks awaiting action. To process each claim, insurance adjusters take these main steps:
Speaking to the Claimant
An adjuster calls the injured person first thing when they receive a claim. During this conversation, they learn about the incident, the extent of damages, and the evidence available in the claim.
Sometimes, the insurance adjuster may even call victims before they file a claim. This happens when their client reports an incident, and they decide to research the case. During the conversation, the adjuster may try to catch injured people off guard and pressure them into making damaging statements.
Remember that the law does not obligate you to speak to an adjuster. Ideally, you should hire a lawyer who can advise you on what to say or not say to the insurance company. If you decide to speak to an adjuster, be concise and stick to the facts. Do not agree to give a recorded statement during the first conversation.
Conducting a Visual Evaluation
An adjuster may travel to the accident scene in some cases. This can help them figure out what happened and allow them to evaluate property damage. The adjuster may decide against a visual evaluation if the claim amount is small. However, expensive claims warrant their maximum attention.
The adjuster may also ask to meet with the claimant. Speaking to victims in person can help them strong-arm injured people into making statements. Again, remember that you are not obligated to meet with an insurance adjuster. If they ask for a meeting, consider contacting your lawyer.
Speaking to Witnesses
The insurance adjuster looks for witnesses. In most cases, the police report includes witnesses’ contact details. The insurance company does not just talk to eyewitnesses to see if your story matches theirs. They record statements that can work against you.
Requesting Medical Records
The adjuster has to review your medical records to understand whether your claim is legitimate. You may have already sent some medical evidence when filing a claim. However, the adjuster may need more.
Adjusters pay close attention to medical information since it is usually crucial evidence in the claim. If they cannot find sufficient proof about the extent of your injuries, they can request it.
It is up to you to decide whether you want to share medical records. Refusing to share could cause the adjuster to claim a lack of evidence and deny the claim. However, before sending over your medical records, make sure to review them. Ask your lawyer which documents are worth sharing and which could hurt your case.
Sometimes, an adjuster may ask you to sign a HIPAA (Health Insurance Portability and Accountability Act) release form. This release will give them access to all of your medical records.
Never sign any data releases until you speak to a lawyer. Your entire medical history may contain evidence that adjusters could use as leverage to deny the claim or minimize the payout.
If the insurance adjuster doubts your injuries, they may suggest conducting a medical examination. However, doctors hired by insurance companies usually perform the examinations. These doctors are likely to say that your injuries are not severe.
The good news is that you do not need to agree to such an examination. If your case goes to court, the judge may request a medical exam conducted by an independent professional. Speak to your lawyer to find out what information you need to release to the insurance company.
Evaluating the Case
Once the insurance adjuster has all the necessary information, they can deny a claim, accept it, or accept it at a lower amount than sought by the claimant.
If the insurance adjuster denies your claim, you need to speak to a personal injury lawyer about what to do next. After reviewing your case, a lawyer can advise you of your options.
If you have a strong case, the insurance company may accept your claim but try to offer a low settlement. At that point, you can accept the settlement or argue for a higher amount.
Negotiating with an insurance company can be complex, time-consuming, and frustrating. Many people settle for an unfair amount simply because they cannot deal with the pressure and stress of working with the insurance company. Hiring a legal team that can handle negotiations on your behalf can ease this stress and frustration.
How to Act During an Insurance Investigation
The injured party is the key player when the insurance company conducts a personal injury claim investigation. While you want the insurance company to finish the inquiry quickly, being too helpful could work against you.
During the investigation:
- Avoid sharing unnecessary information. An insurance adjuster can use anything you say against you. Make sure you only say things that help your case. Better yet, delegate communications with the adjuster to your lawyer.
- Do not talk to the insurance adjuster right after the accident. Tell them that you will give a statement later. Take the time you need to regroup, get medical attention, and call a lawyer.
Hiring a personal injury lawyer is the simplest way to contribute to the investigation without hurting your chances of obtaining compensation.
How Long Does an Insurance Investigation Take?
Insurance companies prefer to settle claims as quickly as possible. In most cases, the company finishes the investigation in 30 days. However, some investigations can take months.
Factors that affect the duration of an insurance investigation include:
- The number of parties involved
- The complexity of the evidence
- Severity of injuries
- Presence or absence of witnesses
- The amount at issue in the claim
When insurance companies are worried about making a large payment, they may extend the investigation. Adjusters could take extra time to dig up evidence to leverage in negotiations.
Making the Insurance Investigation Work for You
While insurance adjusters look for fraud and errors during the investigation, they gather legitimate evidence. Their investigation can favor your case if you take the right approach to cooperation, data sharing, and negotiations.
To ensure that the investigation helps your case instead of hurting it, talk to an experienced personal injury lawyer. A lawyer knows how to steer investigations, helping you get the compensation you deserve.