Investigating a Theft Loss: Can It Be Bad Faith Right from the Start?

UPDATED: Jul 14, 2023Fact Checked

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption

Jeffrey Johnson

Insurance Lawyer

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...

Insurance Lawyer

UPDATED: Jul 14, 2023

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

UPDATED: Jul 14, 2023Fact Checked

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?

Consider this…

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.

Case Studies: Investigating Theft Loss and Potential Bad Faith

Case Study 1: The Aggressive Claim Response

John’s car was stolen and recovered after an accident. He wanted it fixed or declared a total loss, but the insurer began asking for excessive personal information, such as credit card statements and proof of income. Is this bad faith?

Case Study 2: Turning Up the Heat

Sarah’s insurer asked for personal information beyond what seemed necessary for investigating her stolen car. Frustrated by the lack of answers, she started requesting written confirmation and sent letters to her adjuster and the insurance company’s President.

Case Study 3: Contacting an Attorney

Mark faced hurdles with his insurer while trying to resolve his stolen car claim. Concerned about the insurer’s actions, he promptly contacted a lawyer specializing in insurance matters for guidance and possible legal action.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption

Jeffrey Johnson

Insurance Lawyer

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...

Insurance Lawyer

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption