In any auto insurance claim, the coverage investigation is one of the first and most crucial aspects of the claim process. Why? To begin with, the sooner you have accurate coverage data, the faster you can process the claim and the happier your customer will be. Also, by quickly verifying available coverage for all parties, you can increase subrogation recovery, avoid subrogation altogether through redirecting your policyholder to the responsible party and ensure the appropriate policy covers PIP claims. By getting the right information up front, you won’t waste resources processing claims you’re not actually responsible for.

This is especially important when you’re faced with an uninsured motorist (UM) claim. It’s imperative that you confirm that no other coverage is available for the at-fault vehicle or driver so you can avoid the unnecessary time and expense of processing and paying a claim that belongs to someone else.

It can be very costly if you don’t.

Avoiding the cost of bad data

The cost of bad, incomplete or late data on a UM claim can be massive. The average payout on these claims is approximately $8,500.[1] A recent LexisNexis study of uninsured motorist claims from 2017 revealed more than $7 million in potential payout leakage in the study sample.[2] Based on a LexisNexis analysis of industry statistics completed in June 2020, this extrapolates to over $2.5 billion in potential UM losses annually for the industry.[3]

Coverage investigations are typically done immediately after the claim is received and often not revisited. They may be based on statements from adverse drivers or information provided on a police report. If you don’t get accurate information right out of the gate, you might not get another chance to avoid paying claims that aren’t yours. But it doesn’t have to be that way.

LexisNexis® Carrier Discovery puts crucial claimant and coverage information in your hands throughout the entire claim management process―leading to greater efficiency, reduced costs and risk, and more satisfied customers. It leverages unique data and proprietary analytics to deliver current and accurate personal auto coverage-related information, updated daily, directly to your claims professionals, as early as first notice of loss. This means you get the right data when you need it so you can resolve claims quickly while ensuring payment is made under the appropriate policy.

The cost of bad data is huge. Be sure your coverage investigations are as complete, accurate and current as possible to avoid that cost.

[1] Based on June 2020 LexisNexis analysis of uninsured motorist claims. Includes UMBI and UMPD

[2] Based on Sept 2019 coverage analysis of UM claims.

[3] Based on average claim payment * reported UM claims * % where other coverage is found.