Can Your Recorded Statement Trigger An Insurance Investigation?

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

The reality is, there is little honor when widespread bad faith 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 a genuine insurance investigation. 

If you have filed a claim with an adverse, liability carrier, as a 3rd party claimant, you are under no obligation to provide any type of statement, much less a recorded statement.  However, requests for 3rd party 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, can be utilized by unscrupulous insurance companies as a means to unfairly delay, deny, or devalue a claim 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 insurance claim denied. 

In a first party claim, however, there could arise compelling situations where a delay in the recorded statement would be considered valid – at least temporarily.  For example, your injuries are of a severity to preclude an immediate statement, or you are legitimately seeking the services of an attorney. 

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 guidelines that mandate adjusters to contact  the person filing the claim within 24 hours of the first report of loss.  While their promptness might seem impressive, imagine how the timing could pose inherent damage to your insurance claim if that particular company was inclined to use your statement unfairly.

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 searches for means to deny claims, 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 an unfounded basis for an insurance claim denied.

While misconstruing your recorded statement, or searching for "conflicts" and "inconsistencies", represent the essence of bad faith claims practices, some insurance companies do utilize these practices.

Take the advice of an insurance expert.  Here are some of the steps you can take in an attempt to achieve a fair insurance claim settlement.

Take an active role in the settlement of your insurance claim.
Perceived "inconsistencies and conflicts" in a recorded statement will  likely trigger an "ongoing insurance 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, repeatedly attempt to find out 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, request a copy of the first recorded statement transcript before you submit to a second.  Again, many states have adopted guidelines which require an insurance company to provide the insured with a transcript of their recorded statement if requested.  Make the request in writing.

Reject the notion that the transcript has not been transcribed or is unavailable.  If the insurance company is 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 during the course of an insurance investigation  you are far more likely to achieve a successful claim settlement than those who remain passive.

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