My Property Was Stolen -- Why Is My Insurance Company Investigating Me?

Other than fire claims, no type of insurance claim generates more insurance suspicion than a claim that property has been stolen. Why is that? What should you do if you’re the victim of theft and need to make a property claim under your insurance policy? Let’s discuss.

Insurance companies investigate stolen property claims with scrutiny and skepticism. Insureds must jump through many hoops to prove they played no role in the theft or loss of their own property. Insurance companies demand multiple years worth of tax returns, employment records, cell phone records, bank records, and anything else that they can think of that might get them out of paying the claim. It often takes months or a year or more before an insurance company is satisfied that a legitimate loss by theft actually occurred. By requesting a seemingly endless supply of personal documents and information, including an examination under oath, an insurance company is looking for any evidence that the insured was in dire financial straits and arranged for the property to be stolen or is lying about the theft in order to collect money.

To understand an insurer’s thought process in these situations is to realize that certain red flags will get the insurer’s attention in a bad way. Was law enforcement immediately notified of the theft? Did the insured fully cooperate with the law enforcement investigation? Was the claim promptly reported to the insurer? How old is the policy? Did the policyholder file a theft claim shortly after securing coverage with the insurer? Are the circumstances of the theft odd? Does anything on the surface indicate that the insured is in financial trouble? Is the insured resisting or delaying the provision of information requested by the insurer?

To minimize the hassle of your insurance claim for theft of property, it follows that you should immediately make a law enforcement report and fully cooperate with the law enforcement investigation. You should also promptly notify your insurer in the manner that your policy requires. After that, quickly respond to any inquiries from your insurer and provide any requested information without delay. You have a duty to cooperate with your insurer and provide it with the information requested as it investigates and adjusts your claim. Your goal is to make it abundantly clear that your claim is legitimate by being as responsive and cooperative as possible.

Even if your insurer accepts your property theft claim, there are often disagreements over the value of the stolen property. Insurance adjusters may undervalue your loss and insurance companies almost never want to pay the full value of the missing items. Your insurer company will likely demand an inventory of your property before it approves your theft claim. When investigating the stolen or missing property, your insurer will want to know when, where, and how much you paid for the property. It’ll also need proof that you were in possession of and owned each item that you claim was stolen. Almost all transactions today are made electronically in some manner. There are electronic records for bank accounts, credit and debit card purchases, and online sales.

One of the most frequently falsified parts of property theft claims is the value of the items lost. The insurer will thus want any available proof that the items are worth what you claim. You may need to research the cost of similar goods in your area if you don’t know an exact amount. That can at least give you an approximate cost of the stolen item.

Finally, you might be required to submit to an examination under oath. That’s a formal proceeding during which you’ll be questioned under oath about your theft claim by a representative for your insurer, probably a lawyer. You’ll have to do that if requested — Failure to provide an examination under oath will almost certainly result in the denial of your theft claim. We discussed examinations under oath in an earlier post. Should an examination under oath be requested, that’s a flashing red light that your insurer is extremely skeptical of your claim.

Please don’t hesitate to contact us if you need assistance with an insurance claim.