Must an insurance company thoroughly investigate a claim?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jan 17, 2016

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Insurance Question from Allentown, PA

Asked on 01/17/2016

Must an insurance company thoroughly investigate a claim? On December 2, 2014, my oil tank burst a whole and 110 gallons of heating oil flooded my basement. I was covered for the minimum amount in PA - $10,000. That amount only covered the surface clean up and four months of ventilation. A week later, a third-party investigator came to my home to take pictures and measurements. An adjuster never came to my home. The investigator was told by my insurance company's contractor from Service Master to get the tank and hold it for an investigation. Over a year has gone by and the cause of the hole in the tank was never investigated. Claim is closed.

Answer given on January 20, 2016

When there is a homeowner insurance claim, the insurance company does need to investigate so they can determine the amount of the claim and to pay the amount less your deductible.In this case, since the damage was over the maximum coverage for this type of claim, a thorough investigation is probably not necessary. The amount paid was what you would get no matter what. Even though they took the tank for an investigation, it would not affect the amount you would be paid. Since the tank had a hole in it, it would not be worth anything more to you. They may have saved you some money by taking the tank without you having to spend any money to get rid of the tank.You can call the insurance company and ask if they did any investigation and if so what the results were. It could be that you would have a claim against the manufacturer of the tank if it was found to be defective, but the age of the tank could be a factor there.


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