Auto Insurance Claims: Stolen MiniVan in Wabash, Indiana, child restraint seats, wabash indiana

Question
Hello,

My brother in Wabash, Indiana had his van stolen December 4, 2007.  He reported the van stolen to the police and his insurance company, GEICO, on December 5th. It has not been recovered.  The min-van had two child restraint seats and his tools, which he uses for his work.

An interesting twist to this is that he obtain Georgia auto insurance.  Then a few months later, moved to Wabash, Indiana where he has been for nine months.  He did not make the adjustment to his insurance to reflect the move.  Not sure why.  I would think that this little nugget would complicate matters when filing an insurance claim.  But this is the in-house attorney talking in my head.

Nonetheless, according to my brother, he has complied with the all of GEICO's requirements, filled out all of the forms and sent in the keys.  The only request he did not comply with was to submit to a polygraph test administered by GEICO's own people.  He informed GEICO that he would be willing to submit to a polygraph administered by a non-interested third party.  I would assume Geico believes that my brother had something to do with the van being stolen.  His does have a significant criminal record, has no bank account, and he and his wife, with two kids, are barely making ends meet.  They are trying to get their life back together again and they are about to give up on everything.  

I did my own research and found that his 2000 Pontiac Montana, with 100K miles, has a market value ranging from 4300 to 5700, depending on the condition of the vehicle.

Geico believes that he had a part in the van being stolen. However, I would assume that if they had evidence of this, they would have turned this case over to law enforcement, and my brother would be in jail at this moment.   

It has been 60 days, as of today, and Geico has verbally stated that they are going to deny the claim altogether.  Verbally, GEICO has stated that they believe they will evntually find the van and that my brother had soemething to do with the theft.  He has not received a letter formalizing the claim denial.  

So, I do have a few questions.    

Can GEICO deny his claim, if he refused to take the polygraph administered by their people?  He did inform Geico that he would submit to a polygraph, if administered by a non-interested third party.  

Can GEICO deny a claim simply because they suspect my brother of fraud, yet have no evidence?

Can they deny the claim simply because they believe they will "eventually" find the van?

I have already advised him to wait until he receives a formal letter from GEICO, then contact an attorney.  However, he can not afford an attorney.  They barely have enough money to feed their kids.  I don't know of any attorney's willing take GEICO to court, pro-bono.  Especially, if the attorney risks not being able to recover his/her fees.  I guess this would be a risk.  

I would think that if there were NO evidence of my brothers complicity in this crime, he would be able to sue GEICO for bad faith.  But then again, this would come back to being able to afford an attorney.  

So, is he pretty much screwed on this?  Or do you have any recommendations?

Any help would be appreciated.  Thank you for your time.

Mike

Answer
Hi Mike,

In most states an insurance company has 60 days in a theft claim to either pay or deny the claim unless they issue a reservation of rights letter which can extent the time.

To the best of my knowledge, an insurance company can not deny a theft claim for complicity unless they actually have proof and are willing to refer the case to the state attorney for prosecution. Since he refused to take their lie detector test, they may try to deny the claim for non-cooperation. If this is the case, he should file a complaint with the state insurance commissioners office indicating that he in fact, was willing to take an independent test. This may end up being agreed to with the commissioners assistance. However, you need to advise your brother that if he did in fact have something to do with the theft, he should drop he claim and move on. With the financial trouble he is already in, he should not risk prosecution.

I hope this helps
Richard Hixenbaugh