My Car Insurance Claim Investigation (Expert Advice)

Car insurance claim investigation doesn't necessarily mean you did anything wrong, it's just part of the process. Insurance companies investigate claims to find out who is responsible, and to protect themselves from fraud.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses...

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Reviewed byJoel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/ciccom-live/41b5e36b-joel-ohman.jpg

UPDATED: Jun 25, 2020

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Here's what you need to know...

  • Claims adjusters will handle your claim and speak with you and the other side’s representative to get both sides
  • Insurers will look for signs of fraud to protect their interests
  • Companies may send third-party estimators to assess the damage and then submit photos to the insurer for review
  • Be aware of signs that could raise a red flag for car insurance fraud
  • If you’re found at fault, your car insurance premiums are going to go up

If an insurance company has ever looked into an incident you were involved in, you might have wondered why your car insurance claim was being investigated at all. What is my car insurance claim being investigated for when I am an honest person and haven’t given the company any reason to doubt me?

The answer is, it’s just part of the process. When auto insurance claims are filed, the carrier must determine who was at fault for the loss to determine which driver will be held responsible.

While some states do operate under no-fault systems, where each company pays for their own policyholder’s damages, a majority of states use fault to determine which insurer will pay for damages and repairs.

Why is my car insurance claim being investigated? Car insurance claim investigations typically happen, so your insurance company can determine whose rates are going to go up and to protect themselves from fraud. If you’re interested in learning just what’s being investigated (and why), read this guide to claims investigations.

Worried about higher rates after a claim? Start comparing car insurance rates now by using our FREE tool above!

Why are car insurance claims investigated?

One major reason why it’s so important to have a claims investigation is that, if this was an accident involving multiple vehicles, somebody will be found at fault. What at fault means in a car insurance claim is that the accident was the result of your actions. If the person found at fault is you, your car insurance rates will go up.

Average Annual Car Insurance Rates by Driving Record
DRIVING RECORDClean recordWith one speeding violationWith one accidentWith one DUI
USAA$1,933.68$2,193.25$2,516.24$3,506.03
Geico$2,145.96$2,645.43$3,192.77$4,875.87
American Family$2,693.61$3,025.74$3,722.75$4,330.24
Nationwide$2,746.18$3,113.68$3,396.95$4,543.20
State Farm$2,821.18$3,186.01$3,396.01$3,636.80
Progressive$3,393.09$4,002.28$4,777.04$3,969.65
Travelers$3,447.69$4,260.80$4,289.74$5,741.40
Farmers$3,460.60$4,079.01$4,518.73$4,718.75
Allstate$3,819.90$4,483.51$4,987.68$6,260.73
Liberty Mutual$4,774.30$5,701.26$6,204.78$7,613.48
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Car insurance companies will not hesitate to increase your rates if you’re found at fault in an accident. These major insurers increase their rate by 15 percent at Travelers to 46 percent at Geico with just one accident on your record. As you can see, it’s pretty important to decide the correct person who’ll have their rates increased. Not only that, but insurers also have a pretty big stake in this. Car insurance companies need to maintain a certain loss ratio.

A loss ratio is a number that refers to the combination of claims paid out and premiums charged to the customer.

For instance, a loss ratio of 70 means that $70 worth of claims were paid out compared to every $100 insurers get in premiums from drivers. When choosing a provider, it’s smart to choose a company within the optimum range for loss ratios — within 45 percent to 75 percent. If it ever goes over 100 percent, you’ll likely see a rate increase in the future. If it’s pretty low, that means they’re collecting too much money and not paying out enough in claims.

Top 10 Car Insurance Companies by Market Share
CompaniesA.M. Best RatingDirect premiums writtenMarket shareLoss Ratio
State FarmA++ (Superior)$41.9 billion17.01%63%
GeicoA++ (Superior)$33.1 billion13.41%71%
ProgressiveA+ (Superior)$27.1 billion10.97%62%
AllstateA+ (Superior)$22.7 billion9.19%56%
USAA (Military Personnel & Family Members)A++ (Superior)$14.5 billion5.87%77%
Liberty MutualA (Excellent)$11.8 billion4.77%62%
FarmersA (Excellent)$10.5 billion4.26%61%
NationwideA+ (Superior)$6.7 billion2.73%58%
American FamilyA (Excellent)$4.7 billion1.90%69%
TravelersA++ (Superior)$4.7 billion1.90%60%
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The top 10 major insurers in the country keep a good loss ratio. That’s part of how they stay a top insurer.

Even if you’re not the one who caused the accident, always report it to your car insurance agency. As you can hear in the video below, there are many reasons why you’d want to.

Also, keep in mind that you should make your auto insurance claim as soon as possible after it happens. Each state has a statute of limitations for these types of claims, and they’re fairly generous, as you can see in the table here. There’s no excuse to wait until this time frame lapses.

Car Insurance Statute of Limitations by State
StatePersonal InjuryProperty Damage
Alabama2 years2 years
Alaska2 years6 years
Arizona2 years2 years
Arkansas3 years3 years
California2 years3 years
Colorado3 years3 years
Connecticut2 years3 years
Delaware2 years2 years
Florida4 years4 years
Georgia2 years4 years
Hawaii2 years2 years
Idaho2 years3 years
Illinois2-3 years5 years
Indiana2 years2 years
Iowa2 years5 years
Kansas1 year2 years
Kentucky1 year2 years
Louisiana1 year1 year
Maine6 years6 years
Maryland3 years3 years
Massachusetts3 years3 years
Michigan3 years3 years
Minnesota2 years6 years
Mississippi3 years3 years
Missouri5 years5 years
Montana3 years2 years
Nebraska4 years4 years
Nevada2 years3 years
New Hampshire3 years3 years
New Jersey2 years6 years
New Mexico3 years4 years
New York3 years3 years
North Carolina3 years3 years
North Dakota6 years6 years
Ohio2 years2 years
Oklahoma2 years2 years
Oregon2 years6 years
Pennsylvania2 years2 years
Rhode Island3 years10 years
South Carolina3 years3 years
South Dakota3 years6 years
Tennessee1 year3 years
Texas2 years2 years
Utah4 years3 years
Vermont3 years3 years
Virginia2 years5 years
Washington3 years3 years
Washington D.C.3 years3 years
West Virginia2 years2 years
Wisconsin3 years3 years
Wyoming4 years4 years
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For instance, California’s statute of limitations is two years for a personal injury claim but three years for a property damage insurance claim. And yes, they are looking for signs that you may be trying to commit fraud, also.

Why do car insurance companies investigate your claim for fraud?

Claims are also investigated to detect fraud. Since insurers are in business to make money, they must take the appropriate steps to spot red flags and stop the payout on a claim that was staged or unfounded.

Since insurers are in business to make money, they must take the appropriate steps to spot red flags and stop the payout on a claim that was staged or unfounded.

With car insurance fraud being a major issue in the United States and fraudsters getting more creative over time, insurers are making bigger efforts to spot scams before the scammer gets paid. In fact, the National Insurance Crime Bureau reports that questionable claims have gone up 27 percent in recent years, showing investigations are more of a priority.

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What happens when an insurance company investigates your claim?

So, you’ve reported your claim. It can be nerve-wracking if you have a lot of money on the line. Let’s look at what you can expect, and hopefully, that will help allay your fears.

Let’s hope you didn’t get hit by an uninsured driver, but chances are higher than you might expect that you did. That’s especially true if you live somewhere like Florida or Mississippi, where the uninsured rate is around a quarter of drivers. That means one in four drivers around you is driving without insurance.

Uninsured Car Drivers by State
RankStateUninsured
1Florida26.70%
2Mississippi23.70%
3New Mexico20.80%
4Michigan20.30%
5Tennessee20%
6Alabama18.40%
7Washington17.40%
8Indiana16.70%
9Arkansas16.60%
10D.C.15.60%
11Alaska15.40%
12California15.20%
13Rhode Island15.20%
14New Jersey14.90%
15Wisconsin14.30%
16Texas14.10%
17Missouri14%
18Illinois13.70%
19Colorado13.30%
20Louisiana13%
21Oregon12.70%
22Ohio12.40%
23Maryland12.40%
24Arizona12%
25Georgia12%
26Kentucky11.50%
27Minnesota11.50%
28Delaware11.40%
29Nevada10.60%
30Hawaii10.60%
31Oklahoma10.50%
32West Virginia10.10%
33Montana9.90%
34Virginia9.90%
35New Hampshire9.90%
36Connecticut9.40%
37South Carolina9.40%
38Iowa8.70%
39Utah8.20%
40Idaho8.20%
41Wyoming7.80%
42South Dakota7.70%
43Pennsylvania7.60%
44Kansas7.20%
45North Dakota6.80%
46Nebraska6.80%
47Vermont6.80%
48North Carolina6.50%
49Massachusetts6.20%
50New York6.10%
51Maine4.50%
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But, as long as you have sufficient coverage on your vehicle, you should be okay, though your rates will go up if you caused the wreck.

Each state requires you to have a specific limit of liability insurance. Full coverage includes collision coverage, which covers property damage in an accident, and comprehensive. Comprehensive coverage pays for things that are not collision-related, like a tree limb hitting your car that’s sitting in the driveway, or theft, vandalism, and hail damage.

There are other types of insurance that offer additional coverage, such as Personal Injury Protection (PIP) and MedPay, which are there to offset medical bills.

How do insurance companies investigate accidents? Let’s take a look at the process in the next section.

What will you be asked when filing a car insurance claim initially?

When filing a car insurance claim, you’ll speak with a customer service agent who’ll ask you scripted questions. The answers that you give at this time will help adjusters and investigators to determine how deep they must delve throughout the claims process. What a claims adjuster does is to investigate the facts of the loss and determine what’s covered and how it will be covered. Some claims appear to be much more obvious than others.

Here are some of the questions that you’ll be expected to answer on the spot when filing your claim:

  • What day and time did the loss occur?
  • Where did the loss occur?
  • What were the road conditions/weather?
  • What is the name, phone number, address, and policy number of other parties involved?
  • Were there witnesses? Do you have the names and numbers?
  • Do you have a police report number?
  • Was the loss in an area with CCTV cameras?
  • Did anyone in the vehicle suffer injuries?
  • Did anyone seek immediate medical treatment?
  • What parts of your vehicle were damaged?
  • What parts of the other vehicles involved were damaged?
  • Did the other driver say anything about fault at the scene?
  • Where is the vehicle now? Was it operable or towed?
  • Do you have pictures of the scene or the damages to each vehicle?

There may be a few others, but they’re usually pretty standard and are aimed at getting to the truth.

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What happens once the car insurance claim is forwarded to an adjuster?

It’s very important that you stick to the facts during your claim phone call. Never apologize or give your opinions on fault at the scene or on the phone with a third-party adjuster because this can affect the investigations.

How do you investigate a claim? After you’ve answered all of the pertinent questions during your first phone call, the claim will be assigned to an adjuster who will start to run reports, conduct more thorough interviews, request documents, and review photos and bills.

An in-person car insurance inspection after an accident is not uncommon. This involves the adjuster looking over the damage to your vehicle directly rather than in pictures alone.

You may need to discuss with your adjuster about what parts will be chosen as replacements if needed.

The Office of the Insurance Commissioner for Washington State notes that you may be able to use Original Equipment Manufacturer (OEM) parts, but other times you’ll need a substitution. This is generally true for the entire country.

Here are some tips for working with your car insurance adjuster. Tip number one: Be nice to them.

Remember: they’re there to help and get things settled fairly. It’s during this time that the professional representing each claimant will look for red flags.

What types of reports can adjusters run to investigate my car insurance claim?

After the adjuster has reviewed your policy and the coverage available at the time of the loss, they will proceed to investigations. As a claim is being processed, several reports are run. The adjuster needs to investigate both the claimant’s history and record and the details of the loss.

Here are some of the reports that property and casualty adjusters can use as they’re trying to get to a fair settlement:

  • Police report with witness statements
  • The CLUE report, including the claims history report of each claimant
  • An endorsement report showing recent changes made on the policy
  • The policyholder’s credit report and employment history
  • Civil and criminal search on each person
  • Medical records showing pre-existing conditions for injury claims
  • Car history reports showing prior damage sustained before the loss
  • Damage reports showing estimates on repair costs
  • Value reports showing the fair market value of the vehicle
  • Your social media accounts for any information you may have posted regarding the accident

If something gets flagged in this process, the claim may be sent to an investigator to look into further.

How long does a car accident investigation take? How long does Geico take to investigate claims? What about Progressive insurance claim investigation? How long does an insurance company have to investigate a claim? Is there a limit? That answer really depends, but an investigation usually takes an average of 30 to 45 days. It might be even less if it’s straightforward, but it can drag out longer if it gets forwarded to a private investigator.

When do private investigators get involved in a car insurance claim?

If the adjuster is convinced that a claim is fraudulent, they might go as far as to hire a private insurance claim investigator to follow you. This is most common when you’re claiming serious injuries that could affect your quality of life.

Make sure you realize this is a possibility if you’re tempted to exaggerate your injuries because the company could file fraud charges against you. To do this, they might hire a private investigator to make sure the claim is legitimate. Scott, who is a Claims Special Investigations Unit investigator, discusses in this video what his duties are when investigating a claim.

Insurers spend millions on claims payouts annually. To avoid spending more than projected, the company needs to weed through the claims and determine which are legitimate.

If you’ve done business with a carrier that hasn’t been fair through the investigations process, it might be time to switch carriers. Use an online rate comparison tool and then find a company known for claims service and bargain pricing.

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How can an adjuster spot car insurance fraud when a claim is filed?

First up, what constitutes insurance fraud? Car insurance fraud is a huge problem in the U.S., with an estimated $30 billion stolen each year.

Among those who commit insurance fraud are:

  • Professionals who either inflate charges for services rendered or charge for services that were not performed
  • Organized criminals who launder money through their business activities
  • Everyday people who view filing a claim as an opportunity to make a little money

According to the Insurance Information Institute, insurance fraud can be considered either “hard” or “soft.” Hard fraud occurs when somebody deliberately fabricates an accident. On the other hand, soft fraud is a more opportunistic fraud. This occurs when people pad legitimate claims or when companies misrepresent what they do in order to lower workers’ compensation premiums.

Do insurance companies investigate injury claims? Yes, and here’s why.

The Insurance Research Council (IRC) says that fraud accounted for somewhere between 15 and 17 percent of all claims payments for bodily injury liability in 2012. They estimate that between $5.6 billion and $7.7 billion was fraudulently added to paid-out claims for bodily injury payments. Compared to a decade prior in 2002, it was around $4.3 billion to $5.8 billion.

It’s important to know that, if you commit insurance fraud, you will likely face heavy penalties and fines, possibly even jail time. It’s very important to only report legitimate claims and not add any little extras.

It can be difficult to spot a fraudulent claim on words alone, but records and data can be definite red flags to adjusters who are investigating both the claim and the claimant. One immediate red flag that signifies fraud is when there are discerning patterns in the claimant’s claim history.

All adjusters will look for suspicious loss indicators that have been designated by the National Insurance Crime Bureau.

What are common indicators of suspicious loss for car insurance claims?

Not every suspicious loss indicator means the filer is guilty, but claims with common indicators will be more thoroughly investigated and scrutinized.

Here are just some of the indicators you should be aware of as a claimant:

  • Claimants who report a large loss and are calm and not flustered
  • Claims submitted shortly after the named insured has increased coverage
  • Claimants who produce handwritten receipts or invoices for repairs of purchases
  • Fire claims reported shortly after members of the household left the property
  • The accident happened late at night and/or in a secluded area
  • Injuries that were reported are subjective and not easy to medically confirm (headaches, dizziness, inability to sleep, etc.), especially if multiple occupants report the same injuries
  • Multiple occupants were in the vehicle (this allows claims to be made for multiple people at once)
  • Medical treatment was refused on site
  • The accident happened as the result of a sudden lane change or braking

In the event of a stolen car, the insurance claim investigation may also look at the police report or other facts of the theft. This is to make sure the stories match up. There are many factors that insurers look for, but you shouldn’t have to worry if the claim is legitimate.

Hopefully, we’ve answered all your questions about your car insurance claim and why your insurer is looking into it. But, are you sure you’re getting the best rates? Start comparing car insurance rates now by entering your ZIP code in our FREE tool below!

Frequently Asked Questions: Car Insurance Claims Investigation

Do insurance companies investigate car fires?

Yes. If there is a claim for a car fire, the insurance company will investigate it just like any other claim. They will want to determine the cause of the fire and whether or not it is covered under your policy.

Can I cancel a car insurance claim under investigation?

My insurance company is investigating me, and I want to cancel the claim. Can I do that? This is a complicated question. Withdrawing an insurance claim while the claim is under investigation may be difficult. If fraud is suspected, you may not be able to stop the investigation by canceling the claim.

A claim that is not being investigated for potential fraud can usually be canceled.

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