I am often asked – if there was one mistake I could help people avoid in making insurance claims, what would it be?

The answer is easy.  Do not take communications with your insurance company casually.  The may not be trying to help you, and insureds are often surprised by aggressive questions during so-called “recorded statements.”  Be careful when carriers ask for one.

 companies often ask for details or interviews when investigating a claim.  Often, such requests seek information that
may affect whether or not a claim is covered under your policy – whether it is an 
auto, homeowners, or property loss.  Your 
response – or failure to completely respond – can affect your coverage, so be 

If your carrier asks for
 documents or consent forms

Although it
 may surprise you, many courts in many states including Virginia have held that insurance companies 
can sometimes delve deeply into your finances, as well as into other
details that may bear on whether they might say you are trying to make a fraudulent

 under some of those cases, your carrier can sometimes deny your claim simply because you 
failed to respond to a reasonable request.
 Since your definition of what is reasonable may differ from what the law
 says, you may be wise to either respond or ask a lawyer to help you decide what
 you can fairly keep from sharing. Whether
 you want to pay a lawyer may depend on your claim’s size.

often ask for: bank records, credit card
 statements, mortgage information, tax returns, past bankruptcy information, and
 in some cases, items like phone bills. 
You will put your claim at grave risk if you completely refuse to share
 any such information. That said, your carrier 
probably is not entitled to have all that information going back ten years
(assuming you have it) or getting some of that data from after the claim.

Insurers may 
also ask you to sign consent forms so their private investigator can collect
information you may no longer have from your banks, creditors, and other
 places. Refusing to sign any consent at 
all could also lead to your claims’ denial, but these consent forms can go far
 beyond what the insurance company should have any right to look at.

If you get 
asked to sign such a form, and you have a big claim, you may want to seek a lawyer’s help.  At the very least, you may want to ask that 
the consent only allows access to records from the current and prior year – at 
least at first.  And you should ask that 
the consent expire within ninety days.
 You don’t want them to use it to get your private data a year from now.

Also, watch 
out for consents that waive attorney-client privilege, your privacy rights, your
law enforcement rights, your privilege against self-incrimination, or any other 
constitutional right – you shouldn’t have to sign such consents.  If it looks like you are giving up a lot of
rights, you may be giving away too much. After the 
first round for requests, the carrier may have follow-up questions.  If the insurance company is willing to keep 
spending money to investigate, that can hint they may be planning to deny your 
claim.  Be careful in what you do next.

Beware the recorded 

 frequently ask for recorded statements after a claim is made – often shortly 
after.  Take care when they do.  Here’s why:
 they seem informal, but they aren’t.

First, some 
carriers no doubt employ this tactic:
 request multiple statements from an insured, then use the inconsistencies that always 
happen when someone tells their story more than once as grounds to claim you
 lied during the claims process. That
 alone can lead to a denial.

 insurers usually have trained questioners take the statements.  You should expect
tricks and traps, and be ready for an aggressive style with detailed personal
 and financial questions. Your refusal to
 answer questions, or conflicts between your answers, or conflicts between an answer and 
documents all can lead them to deny your claim – whether fairly or not.

Third, most policies do not specifically require that you provide recorded statements.  You have a general duty to cooperate and
 provide information, but policies often require only an “examination under
oath” – a formal statement to a court reporter who makes a written
transcript.  Those cost more money to
 take, in part because attorneys usually take them, so insurance companies are 
less likely to use them as a fishing expedition or simply to create
 contradictory statements.

 on your facts, you may want to tell your carrier that you are happy to speak 
with them, but only through an exam under oath.
 But use care.  If you give such an
 exam, you should probably pay for a lawyer to sit with you.  The insurer will probably have their lawyer 
take the exam.

you do, do not assume the carrier is on your side when they ask to record 
your statement.  Assume it is working 
against you until facts prove otherwise.

Taking an examination 
under oath

Exams under
oath cost insurance companies money.
 They have to pay hundreds if not thousands to a court reporter to 
transcribe what you say.  They may have 
to pay a lawyer hundreds per hour to prepare for and take the exam.  So if an insurance company decides it is
worth its money taking such an exam, it is worth your money hiring your own
lawyer to help you when they do.

have lawyers who can use aggressive, trained questioning methods that can hurt
your claim.  The law may sometimes allow them to explore
 your personal finances, medical history, past insurance claims, or other topics
 you may not want to discuss, even though you have done nothing wrong.  Perhaps most importantly, if the insurance
 company decides – whether justified or not – that you are bringing a false 
claim, that can expose you to criminal liability.

You may want a 
lawyer there working for you who understands what they can ask and object when
they go beyond the line.  A lawyer can
 also protect you against questioners who use an abusive tone or harsh words to
 rattle you.  If a questioner hits a
 sensitive topic (and even people making valid claims can have them), a good 
lawyer can help minimize the damage to your claim.

this – your claim’s actual validity may not matter if the insurance company can
make it look fishy.  And fishy may often 
be enough for them to deny your claim. 
If that happens, you may need to pay to sue them if you want to ever 
collect what they owe you.  Spending
 money now can save money later.