The Utah Department of Insurance has forced insurance companies to pay nearly $3 million out to consumers over the past five years when carriers have first declined to pay, public records show.
In all cases, the carrier was shown to reach an unfair decision in a claims investigation, ignoring evidence or unjustly denying consumer claims in order to avoid paying.
The records were looked into following an incident in which Utah resident David Norris had the interior of his 1997 GMC Sierra burned, likely by napalm.
After discovering the damage, Norris immediately called local police, which called in the fire department and arson investigators, coming up with an initial declaration of arson.
“There was no question about it,” Norris said.
Norris gathered reports from the police and fire departments – which even named a suspect – and submitted a claim with his insurance company,
GEICO. Yet
GEICO delayed making payment.
“They were investigating me,” Norris said. “They said they needed to clear me of being a suspect.”
GEICO allegedly ignored the first responder reports and continued with its own investigation, saying it would not be paying Norris’ claim until the carrier had a chance to finish its own investigation. The carrier did not even pay for a rental car in the meantime – a benefit included in Norris’ policy.
Norris waited for a month without a car and no word of an update on the investigation from GEICO.
Utah Insurance Commissioner Todd Kiser defended GEICO in the case, saying insurance companies are required by state law to do an independent investigation in order to determine responsibility. They have no requirement to lean conclusively on police or fire reports, he said.
“It’s required of insurance companies to try and cut down on insurance fraud, which is the second highest white collar crime behind tax evasion,” Kiser told
KUTV.
GEICO eventually completed its investigation of Norris, siding with law enforcement that Norris was not responsible for the fire. The company paid the claim, and Norris is now rebuilding his truck.
Although GEICO said many of their investigators are former law enforcement officers, Norris is still unhappy with the experience.
“They should have treated me like a customer instead of a fugitive,” he said.
