Vehicle Theft Claim: When the Insurance Company Requests Your Phone Records, Bank Statements, and Tax Information
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UPDATED: Jun 19, 2018
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When a claim is made under a comprehensive auto policy for a stolen vehicle, the insurance company may, and frequently does, transfer the claim to the fraud department. Car thefts, particularly situations when the vehicle is never recovered or the vehicle is recovered after it has been stripped or burned, tend to raise red flags for claims handlers. Being that fraudulent claims are a realistic problem in the insurance industry, especially involving auto thefts, insurance companies do have some legitimate cause for concern. This concern must be weighed against the specific evidence of each claim as well as the privacy concerns of the insured.
Duty to Cooperate with Investigation
When a claim is transferred to the fraud department, special investigation teams will begin an investigation of the claim. It is your duty as the insured to cooperate with investigations. However, certain insurance companies have policies where every auto theft claim automatically triggers this higher level of investigation, even when the facts of the claim do not warrant such attention. This is an institutional bad faith practice on the part of these insurance companies and it is far beyond your duty to comply with the investigation. In such instances, you may be entitled to compensation based on the bad faith actions of the insurance company.
Phone Records, Tax Returns, Bank Statement, and Business Records
During these investigations, the Special Investigations Units (SIUs) may request your phone records, tax returns, bank statements, and business records. The SIU will conduct burn pattern analysis, financial reviews, credit checks, and interview third parties, including your family and associates, in order to try and establish some nexus between you and the auto theft. The SIU is looking for any possible motive you may have had to orchestrate a fraudulent claim or any shred of evidence linking you to the theft. The insurance company essentially makes you and your possible criminal activity the first target of the claim investigation rather than focusing on the evidence presented by the factual situation surrounding the theft.
Reasonable Suspicion for Requests of Information
In order to request bank statements, tax information, and phone records, the investigators and claim handlers must have some reasonable suspicion that you were involved in the theft. Absent any such reasonable suspicion, the request for your personal information and records is made in bad faith and punishable in the courts. Even when the required reasonable suspicion for such an investigation exists, the information requested must be reasonably related to the claim. Overly broad investigations may also be a violation of the insurance company’s duty of care under the policy.
Prompt Payment of Claims Act
Insurance companies use these types of investigations to either find a basis to deny the claims based on your alleged involvement in the theft or as a tactic to delay paying the claim indefinitely. Many states have passed a Prompt Payment of Claims Act which mandates that the insurance company must either:
- Make a decision on whether to pay or deny the claim within 40 days; or
- Give notice within 30 days as to why they have not made a decision on the claim, and must include a request for the information necessary to decide the claim.
(Exact number of days differs slightly depending on jurisdiction) If the insurance company is delaying deciding your claim, you may be entitled to compensation based on bad faith.
Get the Help of an Experienced Insurance Attorney
When you have been the victim of car theft, the last thing you need is for your insurance company to immediately begin an intrusive investigation into your assumed criminal culpability in the theft. If your comprehensive auto insurance claim has either been delayed without a decision for more than a month or has been wrongfully denied, contact an experienced insurance attorney. A skilled insurance attorney may be able to make the insurance company pay the benefits owed to you under your claim and may also be able to get you compensation for the insurance companies egregious conduct in wrongfully processing your claim.