Unfair Claims Practices - Misuse Of The Recorded Statement

Within the realm of good faith claims handling, all insurance companies are obligated to focus on paying a legitimate insurance claim rather than searching for a means to achieve a claim denial. Unfortunately, unscrupulous insurance companies utilize unfair claims practices, engage in unwarranted insurance disputes, and prey on unsuspecting consumers, all for the purposes of avoiding the claim payments that they are obligated to honor.

The reality is, there is little honor when widespread unfair claims practices overpower the duties of an insurance company. And beware, those practices begin as soon as a claim is filed.

Case in point – the recorded statement.

If you have filed an insurance claim with you own insurance company, the "Duties" clause of your policy obligates you to provide a recorded statement as part of genuine insurance investigation. It is important to note, however, that if you have filed a claim with an adverse, liability carrier, as a 3rd party claim, you are under no obligation to provide any type of statement, much less a recorded statement.

When you have filed a legitimate insurance claim for which you are entitled to compensation for your losses as a 3rd party, requests for recorded statements are often satisfied because it is reasonable to conclude that your cooperation will expedite the claim settlement.

But beware – recorded statements, from any and all parties to a claim, are utilized by unscrupulous insurance companies as a means to unfairly delay, deny, or devalue your insurance settlement, and to engage in illegitimate insurance investigations to achieve those means.

With regard to a first party insurance claim (where you have filed for coverage from your own insurance company), failure to submit to a recorded statement places you at risk of a near certain claim denial.

However, there could arise compelling situations where a delay in the recorded statement would be considered valid. For example, your injuries are of a severity to preclude an immediate statement, or you are legitimately seeking the services of an attorney. Nonetheless, you will be required to submit to the statement, and failure to comply literally invites a claim denial.

In fact, most states adapt good faith standards which prevent an insurance company from demanding statements when the insured is under duress.

But for our purposes here, we will assume that you submit to the recorded statement immediately following your loss.

Most insurance companies have adapted "customer service" guidelines that mandate contact with the person filing the claim within 24 hours of the first report of loss. While the promptness of the response might seem impressive, imagine how the timing could pose inherent damage to your insurance claim.
 
Considering that most all insurance claims are at least distressing, if not worse, is it possible that within a day or so of your loss you might not be in full command of all of the facts? Is it reasonable to pin you down on the exact nature of your damages or the complete extent of your injuries immediately after the loss?

In a reasonable and valid insurance investigation, these complications are taken into account. But in instances where an insurance company has adapted a practice to search for a claim denial, the content of your recorded statement could prove to be extremely damaging if used to twist the facts to your disadvantage.

In your legitimate insurance claim, while you have no intention to misinterpret the facts in your recorded statement, an unfair evaluation of the "conflicts" in the statement transcript might easily serve as a basis for a claim denial.

While misconstruing your recorded statement, or searching for "conflicts" and "inconsistencies", represent the essence of unfair claims practices, the practices persist, resulting in bitter insurance disputes and unfair claim denials.

Consider these basic insurance claim help tips in the event you ever encounter unfair insurance practices and claims delays in the course of your insurance claim.

Take an active role in the settlement of your insurance claim

Generally, perceived "inconsistencies and conflicts" in a recorded statement warrant "ongoing investigation". For this reason, you must maintain frequent, courteous contact with your adjuster. You have the right to know if your claim is delayed and, if so, what you can do to expedite the process. Of course, consistently attempt to ascertain the exact reason for the delay.

Document your contacts with your adjuster, emphasizing your willingness to cooperate and to provide any additional information that could alleviate the delay.

While follow-up recorded statements are sometimes ill-advised, if there is a request for another statement, consider that they are focusing on your statement as a basis for the delay. Request a copy of the recorded statement transcript before you submit to a second. Again, most states have adopted guidelines which require an insurance company to provide the insured with a transcript of the recorded statement if requested. Make the request in writing.

Reject the notion that the transcript has not been transcribed or is unavailable. If they are prepared to issue a claim denial on the basis of your recorded statement, they simply must be in a position to produce that statement.

By assuming an active role and refusing to allocate the power to the insurance company, you are far more likely to achieve a successful claim settlement than those who remain passive.

A veteran of the insurance industry, former insurance investigator Jane Pytel's e-book Power To Profit enlightens readers to refuse to accept that the insurance company holds the power.  Now is the time for you to discover how you can protect yourself from an unfair insurance dispute. Join those who have already benefited from Jane's unique insurance claim help tactics.

© Jane Pytel 2010