Auto Insurance Claims/Insurance claim on stolen car
QUESTION: My son's car was stolen in front of our house on 8/6/13 in the middle of the night. The next day when the car was discovered gone the police were called and a report was taken. Then the insurance company was called and I reported the car stolen. The car was found stripped except the tires and wheels and recovered out of a river the next day. My insurance company is State Farm and now they are requiring a statement under oath with their attorney from my son and I. They only said it was because they needed more information and that I'm more than welcome to bring my attorney, which made me wonder why I would need an attorney. I have researched what it means on the internet and discovered insurance companies do that if they suspect fraud and/or don't want to pay the claim. This is very disturbing to me that the insurance company investigator thinks we could have committed the crime, therefore, I must be as educated and know all the facts in this kind of situation in order to prove our innocents. If this is true, do I need to hire an attorney to go to the statement under oath questioning? I don't even know what kind of attorney I would need to hire if necessary.
Your help in this matter is greatly appreciated and I look forward to hearing from you.
ANSWER: Hello Crystal,
You are wise to do your homework. And, yes, there are absolutely some insurance that will use a statement under oath, formally known as an Examination Under Oath (EUO), solely as a means to find reasons to deny claims.
Let's take a look at your claim. First of all, what information could be missing? If you have provided all of the information required of you, then what could they want? Obviously, they want testimony. You can expect to be asked plenty of detailed questions. You will know some of the answers, there will be other answers that you will not know. If you don't don't say so. Don't presume or guess.
As to testimony, I can give you one solid rule. It is improper for insurance companies - or the lawyers who represent them - to ask "trick questions". Trick questions are those that are vague or pointed. They are the type of questions that attempt to get you to "hazard a guess." They are designed to confuse, or to solicit information that is "half right". Ultimately, they are designed to provide enough circumstantial "junk" to "justify" a claim denial.
Unfortunately, while the tactic is improper, you can rest assured - it happens all the time. And in your case, I assume they will bring in both you and your son. What do you suppose the chances would be that an insurance company could attempt to pattern the two EUO's to conflict?
Let's take a second look at your claim. What are some of the potential red flags? I'm not suggesting that any of these apply to your particular claim, but these are the types of things that will trigger an EUO.
You son - does he have an arrest record? Has he filed "suspicious claims before?" Or, does he have a history of claims period? How old is he? Is he one of those "pesky teens or young 20's"? Does he have an arrest record?
Is your car expensive? That is, does it represent a sizable payout?
Has your claim been referred to the SIU (Special Investigations Unit)? If so, that is a sure message to you that fraud is suspected.
Was the car found with the keys intact? Was there damage to the ignition? Was there no damage to the ignition?
With respect to ignition damage, expect either way that the insurance company has a report from an "expert". Sometimes ignitions are superficially damaged. Other times - and most often - the ignition is not damaged. Regrettably, there are experts out there that will take either scenario to "prove" that "the insured did it". Either way, the EUO will focus on the ignition.
And if the keys are in the vehicle - you are going to have to provide an absolute explanation why.
I think by now you have the point. Vehicle theft claims can be extremely difficult. Even completely innocent people can get thrown under the bus.
Since you have provided the name of your insurance company, let it be said that I am not pointing a finger at your carrier. This is not about your carrier. What I am saying is the after of years of experience with the insurance industry, these things do happen and you have to be prepared.
What should you do? I can tell you what I would do - and I suggest you strongly heed this advice. Take an attorney with you to the EUO. Again, take an attorney. A reputable, insurance specialized attorney. Call the bar, ask if they have a referral process. Or conduct a search on your own. (I feel compelled to add this, please don't take this personally: if you have spoken to your son and he did have something to do with this - you need a criminal attorney.)
You need an attorney for several reasons. First, if you have an attorney with you, you are far less likely to be "harassed" during the EUO.
Second, you are protecting your rights under your policy. Your attorney cannot "speak" during the EUO - it is not like a deposition. But he can advise you of your rights under your policy. This is extremely important. Extremely.
Third, with an attorney on the case, an insurance company is less likely to deny your valid claim. From their perspective, you are far more likely to "sue" for damages - particularly and potentially bad faith damages - if you have a competent attorney with you.
Whatever you do - do NOT fail to attend the EUO. That means a certain denial. And do not allow your attorney to have you walk out during the EUO. If that happens, you have the wrong attorney - and it means certain denial, (Yes, this happens.) The only exception would be in a criminal setting where the claim is not valid and where EUO testimony could infringe on 5th amendment rights - that is a legal point to be discussed with an attorney.
The EUO is an excellent tool - when used properly. But when EUO's become nothing more than fishing expeditions - searches for reasons to deny claims - they can indeed become very dangerous for innocent insureds.
Hire an attorney. Confer with the attorney - both you and your son - before the EUO.
---------- FOLLOW-UP ----------
QUESTION: I would like to answer some of your questions in order to get more information from you in this matter. My son will be 19 next week and has no arrest record. He has never filed an insurance claim of any kind. His car was an 2002 Ford Mustang GT convertible, which he spent a lot of money fixing this car up and making it his pride and joy and it was in great condition. I would not call this a claim with a high payout. I'm guessing from looking at other Mustang's on the internet the payout would be maybe $4000 to $6000 at the most. He is very mechanical and worked on it all the time and has been for over a year. The police officer that took the report said that someone could have been watching him fix the car up for awhile.
He also has built a go cart from the ground up and always is working on it and his car. My son loved that car and I know he had nothing to do with it being stolen. He is a good young man that has always made good decisions.
We live on 20 acres in the country and he lost his keys to the car 4 days before it was stolen. He was ramping a big hill in our back pasture and believes that's when he lost the keys but could never find them. When the car was recovered the key were found in the ignition but only the car key. His house key, a small safe, and shed keys were not with his car key. I had to change out all of our locks for this reason. Behind our back pasture there is a housing addition that has a lot of criminal activity and is known as the drug place for the town we live in. My husband and I have encountered people in our back pasture fishing in our pond and run them off and they come from that housing addition. My son and I don't know if the key that was found in the ignition was his key or if another key was obtained somehow.
My son had gone to the local swimming hole with a friend the night the car was stolen and didn't get home until early morning. I was the only one home and I didn't hear anything until my son came in the door early that morning. I am very troubled about this whole situation in that we don't feel safe in our own home and now this has happening.
My husband works on the road and is only home 4 days out of a month. When he came home he also discovered other things missing out by our barn since the theft of my son's car but I don't know if this stuff was taken that night or if thieves are coming back and stealing more stuff. My husband and I have not reported the other missing stuff to the police because my mother-in-law lives on our 20 acres with us and we have all kinds of family that come out here and they use our stuff to work on my mother-in-laws house so I'm not sure what I should do about the other missing stuff. There is missing steel, cooper, an old tool box, generator and car ramps that we know of for sure that is missing. My husband has so much stuff it's hard to tell but that's what he has discovered missing at this point. I need to know what to do to protect our property and ourselves. I am looking into putting security camera's up all around our house and the barn. I don't know what else to do since until someone is caught there is nothing the police can do. I need to protect our innocents in this matter as well as our property and ourselves.
I appreciate any advise you can give me and I am already looking for an attorney and have calls into some.
Hello again, Crystal ...
OK, thanks for the additional information. Now I can tell you for sure that they are focusing on the keys. There is no doubt that this will be the focus of the EUO, and you will need to be prepared. 4 days before? Does he have another key? I don't doubt your account of the facts, but I can assure you there will be lots and lots of questions. And you need to accept the obvious - at this point, they probably don't believe you.
Playing devil's advocate, what motive would your son have to participate in the theft of his vehicle? Was there something wrong with it? Did he stand to make a profit? Was he tired of the car, and decided he could make a profit by selling the parts? Expect the questions to reflect those types of concerns.
But here's the point. For an insurance company to properly deny a claim, there has to be evidence. Even with all the doubts in the world, they would have to be able to connect your son (or you) to the actual theft of the vehicle. But insurance companies behave badly all the time. Again, not implicating your insurance company, but these types of claims are denied all the time. Some with evidence, but most without.
This is precisely the purpose of EUO's - to obtain testimony. But when testimony is manipulated towards achieving a denial, the EUO can be a dangerous environment for an insured.
In a perfect situation, your EUO testimony would be accepted, there would be no evidence to rebut your testimony, and the claim would be paid. But strange things happen too frequently in these types of claims.
As to your other property losses, as bad as that is - it is irrelevant to this claim. The officer's observations are also irrelevant. Be careful when you testify that you answer ONLY the questions answered. Do not volunteer information. If, for example, they ask you if there is crime in your area, then you can answer.
All of this supports my recommendation that you hire an attorney. With an attorney watching and involved, you stand a much better chance of having your valid claim paid and protecting your rights under your policy.
As to security, I agree security cameras might be a wise choice. And - there is no substitute for good locks! You can also post No Trespassing signs if you haven't already. And, if you are victim to burglaries or thefts, always report it to the police. You never know - your property might be recovered and that recovery can point right to the offender. For that reason, always record serial numbers, and for the more important items, take photos.
Hope things work out for you ...