Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

Full Bio →

Written by

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...

Full Bio →

Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 14, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

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

In a nutshell...

  • Insurance companies investigate claims to determine negligence, merit, and appropriate settlement amounts
  • Insurance companies do keep an eye out for potential fraud when investigating claims
  • Customers may wish to hire a public adjuster to represent them

Filing an insurance claim should be a relatively easy process. If someone hits your car and he/she is at fault, submitting a claim to the other driver’s insurance company would be the established process.

When filing a claim for collision or comprehensive insurance, a driver seeks to recover damages to his/her own car and/or property due to personal negligence. This type of a claim is a basic one to process.

Not all claims are completed without any added steps, though. In some instances, an insurance claim ends up being investigated very carefully before a settlement is issued.

Panic may set in when an insured driver hears his/her claim is under investigation. The automatic assumption on the part of a nervous customer is the insurance company suspects fraud.

Whether or not concerns about fraud really exist, the insurance company is going to research the claim to determine fault, costs, and, yes, other issues.

This is all just good business sense. The insurance company has to do this to protect itself and make sure only valid claims are settled. The amounts settled do need to be appropriate.

Compare car insurance rates side-by-side by entering your zip code above.

The Investigation Process

An insurance claims adjuster is the professional who conducts the investigation of the claim. The insurance company dispatches a claims adjuster on its behalf. The insured party can deal directly with the insurance adjuster but this might not be the best approach to take.

The insured could hire his/her own claims adjuster — commonly known as a public adjuster — to deal with the insurance company’s representative.

Here is some information you should be aware of regarding a public adjuster:

  • The insured’s adjuster is retained in a manner not very much different from the way a lawyer is hired. The adjuster represents a client in front of the insurance company.
  • The insurance company would not deal directly with the customer once an adjuster is appointed to serve as a representative.
  • The client must deal with the adjuster as a “go-between” representative.
  • An insurance adjuster is going to charge a 20 – 30 percent fee on any money recovered.

The main benefit here is the adjuster seeks to procure the maximum amount of money on the claim. The insured could end up receiving more money hiring and insurance adjuster than would be the case without hiring one even when the fee is factored in.

Now, what is the insurance company doing besides determining how much money should be paid out on the claim? The insurance company is looking at a few things.

FREE Car Insurance Comparison

Compare quotes from the top car insurance companies and save!

 Secured with SHA-256 Encryption

FREE Car Insurance Comparison

Compare quotes from the top car insurance companies and save!

 Secured with SHA-256 Encryption

Establishing Future Insurance Rates

Establishing future insurance rates through an examination of negligence is necessary. A person who drives his/her car into a tree is far more negligent than someone whose car was hit by an uninsured driver.

In the former situation, the insured was totally negligent. In the latter, the driver was a victim of someone else’s negligence. A person who is a victim is not likely to discover his or her insurance rates skyrocket.

Determining the negligence levels becomes possible when performing a thorough investigation.

Of course, changing an insurance policy is a viable option as well. Comparison shopping after discovering rates have been increased may lead to finding a better price on coverage.

Fraud and Misrepresentation

adobestock_58756272-1600x1600

Those worried about accusations of fraud need to understand fraud generally refers to lying or misrepresenting/withholding facts to procure an undeserved benefit on an insurance claim.

A blatant case of fraud would be when someone without comprehensive insurance damages his or her car on the first of the month, buys the added coverage on the second, and then files a claim on the third.

If the investigation reveals the customer lied about the date, criminal penalties could result. Insurance fraud of this nature probably would rise to the level of a felony.

Misrepresentation may also be uncovered during the investigation.

Someone who lives in one state, but registers and insures a car in another is likely to get into trouble as well.

People do this illegal registration to acquire lower rates, which is foolish. Comparison shopping for lower premiums would be a safer and legal strategy.

Generally, those who tell the truth when filing an insurance claim and are not trying to misrepresent any material facts are not likely to experience any charges of fraud.

Don’t Fret Investigations

The reason someone is investigated when filing a claim is that this is just the nature of the insurance business. A thorough investigation is critical to determine payouts of viable claims and how to dismiss claims that are not viable.

Those who feel they have not been treated right during the investigation process should examine quotes from other insurance companies.

Anytime a customer is not happy with the insurance rates or other matters associated with a policy, looking elsewhere makes sense and is advisable. Comparison shop right here to find the insurer that’s right for you!