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Why investigate UM/UIM claims before settling?

On Behalf of | Jul 3, 2024 | Insurance defense

Most motorists prepare for the possibility of getting involved in an accident with a driver with insufficient or no insurance at all. This is where Uninsured Motorist and or Underinsured Motorist coverage comes in.

The process of handling UM/UIM claims can seem straightforward. However, it’s critical for insurance carriers who provide these policies to conduct meticulous investigations before settling a claim.

What is UM/UIM coverage?

When a driver gets involved in an accident due to another party’s negligence. The hope is that the responsible driver will reimburse them for their:

·       Accumulated medical bills

·       Lost wages

·       Pain and suffering

However, a driver can feel stranded and overwhelmed by out-of-pocket financial expenses if the responsible driver lacks adequate insurance or flees the scene entirely. Suppose the injured driver has UM/UIM coverage; they can turn to this policy for some financial relief.

This safety net can help ensure that the irresponsibility of another driver does not send them into debt. However, due to the nature of UM/UIM claims, insurance carriers that provide them have to contend with potential fraud and discrepancies. This necessitates a rigorous investigative process before settling a claim.

The importance of a thorough investigation

One of the surefire ways for an insurance carrier to help prevent UM/UIM fraud is to include thorough investigations when assessing UM/UIM claims. Meticulously reviewing UM/UIM claims can allow insurance carriers to pinpoint telltale signs that point to fraudulent activities. Taking time to review a claim before settling it can help the insurance carrier to:

·       Substantiate the circumstances of the accident

·       Looking into the involved drivers’ backgrounds

·       Scrutinize the injured driver’s medical records

Even though a speedy resolution might seem to save time in the moment, rushing into a settlement can be detrimental for the insurance carrier. The insurance provider may pay out illegitimate claims, which can compromise the integrity of the insurance system.

Investigation is also crucial to ascertain that the policyholder did not cause the accident. If they were, they ought not to claim UM/UIM settlement. The insurance carrier can use witness statements, police reports, and photographic evidence from the accident scene to establish which driver was responsible for the accident.

Insurance carriers have opportunities for legal recourse against policyholders who make fraudulent UM/UIM claims for their personal gain. With appropriate legal guidance, they can protect their financial interests and foster trust and satisfaction among policyholders.