On the pro side, insurance companies can offer steady, lucrative work and serious street cred.
But you already know that. Which is why this article is all about the cons.
I’m going to break a cardinal rule of the investigative business.
I’m going to provide some direct insight on working with what many believe is the best client in the industry, insurance companies.
Let’s cover the upside first:
1. MONEY – You actually get paid. (Yes, usually within thirty to sixty days, but it’s money in the bank.)
2. CASELOAD – You’ll see a steady stream of new cases. (Yes, that’s true — to a point.)
3. PRESTIGE – If ABC Insurance uses your services, others will, too. That lends credibility to your agency.
These are all legitimate reasons to pursue insurance work. There are also some downsides to consider when working insurance contracts. Contrary to the jingle, they are not on your side.
1. Great work does not equal more work.
I started my first investigative business in 2001, with a focus on insurance claims investigation. I had developed a reputation as a competent investigator and already had two local insurance companies as clients. I was sure we would succeed.
We boot-strapped the business and soon hired a handful of investigators. I was fanatical about the quality of our investigations and our reports. We began hitting home runs — that is, obtaining video that directly contradicted the injury claim by the policy holder. These cases were a blast to work: direct evidence of insurance fraud, video that is a joy to watch. This would certainly bring in new business, additional adjusters, or maybe even an introduction to the head of claims for a different division, correct?
No, sorry! It doesn’t. We literally saved our clients millions, but when we sought new business of any kind, the insurance companies acted like we were not already on their team. We maintained a video-case ratio of more than ninety percent, yet companies that produced a forty percent rating remained on their vendor panel. I was, and remain, totally perplexed by this.
2. Working for insurance companies is strange or worse.
At my company we often joked that after you’d submitted a grand slam case, someone (usually the SIU-Special Investigations Unit) would complain about something random and absurd. Yes, you hit a grand slam, but you caused someone in the stands to spill popcorn!
Weird complaints happened frequently. Once, while working a long-term disability case, we developed a new address for the subject and trailed him through downtown Boston at morning rush hour — to a construction site, where we obtained hours of contradictory video. A blockbuster case.
We submitted the evidence, to rave reviews. But about two weeks later, we received a call from an SIU investigator. We assumed the case was going to the insurance fraud bureau, and he was calling to discuss it — the case was that good.
No, the investigator wanted to know why our investigator missed one time shot. (A time shot is video proof that investigators are actually present.) In this case, the investigator (me) had missed this very important video shot of the street sign prior to the subject departing for work.
I explained that we’d had to get into position quickly for the subject’s impending departure, as we were conducting surveillance on an isolated cul-de-sac. Not good enough for this SIU representative. He was upset that we were out of protocol and insinuated that he would not pay the invoice.
The SIU representative was upset that we were out of protocol and insinuated that he would not pay the invoice. I was shocked, waiting for the punch line I was sure was coming. But no, he was dead serious.
I was shocked, waiting for the punch line I was sure was coming. But no, he was dead serious. I asked if he had watched the related video of supremely contradictory physical activity. He had, but this did not excuse the breach of protocol that occurred seven minutes prior to the subject’s departure.
Huh? We just wiped a two-million-dollar claim from their books, and he thinks threatening nonpayment on the case is a legitimate business resolution. I was seeing red, said some things I shouldn’t have, and ended the discussion by saying if we were not paid in two weeks, we would be unavailable to testify.
I received an apology from the head of investigations a short time later, and we were paid on time. But I was demoralized and left shaking my head.
I have dozens of these stories. Again, working for insurance carriers is just strange. Be prepared.
3. Quality doesn’t seem to matter to insurance companies.
I’ve come to the conclusion that quality reports and contradictory video don’t really move the needle in your favor in the insurance world.
We took pride in our reports and video. But whenever we got a re-opened case with accompanying investigative reports, we would literally laugh out loud. I vividly remember one case in the early 2000s where the investigator wrote — yes in the investigative report(!) — “three unidentified men were seen talking outside the subject’s house, we are willing to bet that one them is the subject.”
Holy cow! Stop the presses! Exactly whose money were they willing to wager?
There was accompanying video depicting the three men, but it was taken from so far away that positive identification would be impossible. I wondered if the insurance company considered this a successful investigation.
We later confirmed with the adjuster that this agency remained on the investigative vendor panel. True story; enough said?
4. There is zero loyalty.
Every year, without fail, we would save our clients millions of dollars …. each! Yet also without fail, we would occasionally get replaced on a vendor panel by competition that our clients would admit was subpar. The explanations varied: We are switching to national vendors. The head of SIU went to school with the president of ABC firm.
Sometimes no explanation was given. Suddenly, cases simply stopped coming in, while we remained one of the top scoring vendors. We would get ghosted by people we had worked with for many years. Simply perplexing.
I distinctly remember signing my second client, a mid-sized workers compensation carrier in Beacon Hill. When I met with the vice president of claims, she relayed a cautionary tale about the company we were replacing: They’d been assigned to surveil a claimant en route to a medical examination and stick with them afterward. The investigator didn’t see the subject leave home and proceeded to the clinic.
Because a blizzard warning was in effect that day, a lot of businesses were closing early. When the operative arrived at the medical office, they deduced that it, too, had closed — and discontinued surveillance. It turns out that the office had stayed open after all. The claimant took the medical exam, and the insurance carrier threw a fit about the missed footage.
I appreciated the heads up and relayed the conversation to my managers. Here, at least, was an error we wouldn’t make! We’d been forewarned. So no problem, right? Wrong.
About three years later, I was summoned to this claims manager’s office for a meeting. In the three or so years since being placed on this approved vendor list, we had moved to the top of the list and remained there. So I wasn’t worried about being fired.
The meeting was exceedingly odd from the start. The claims manager appeared fatigued and looked like she had slept in her clothes. She then retold the same story about the medical exam and impending blizzard, except this time we were the offending vendor!
I reminded her that she had used the same story with us, as a cautionary tale when we signed our contract. She refused to give an inch and stuck to her story. It was a very Twilight Zone moment. I told her we’d gladly rectify any mistakes we had made, but we could not accept the medical exam-blizzard issue as our misstep. I began to wonder how many times she’d told that story and whether it had ever happened at all.
It was impossible to fathom: millions of dollars saved and a misidentified (or possibly invented) blunder would be our demise? Bizarre and chilling.
5. Victory is theirs, but defeat is yours alone.
I know it was you in the back of the van for twelve hours taking an obscene amount of contradictory video. It was you who discovered that the subject was living two towns away and driving a new girlfriend’s car … to his bartending job. You obtained covert video of the subject working, against all claim restrictions, at that outlaw biker bar. You took some big risks on that gig. But back in the claims office, there will probably be little or no mention of you or your company.
The adjuster or SIU representative will claim your kick-ass investigation as their own. There will be congratulations all around the office! Other adjusters will be called over to see the evidence of fraud on video, but the celebrations and accolades are strictly for the insurance company employees themselves.
You may get a positive email from the adjuster or SIU representative, but that’s about it. Even these positive vibes won’t last long. Miss a time shot three weeks from now, and it’ll be like your grand-slam home run never happened. Demoralizing? Frustrating? Certainly. Just know all of this going in and have the right perspective.
Don’t let insurance companies snow you: It’s all about the bottom line.
Collect your checks and don’t expect any hugs or medals.
Please know that I am not trying to steer you away from the lucrative business of insurance investigations. Repeat business is part of a sustainable business model. I just want to offer some hard truths about what the downside looks like, from the perspective of an investigator who has dealt with this industry for twenty long years — and has found himself too often, despite all his best efforts, left out in the cold.
About the Author:
Barry Maguire is a twenty-year veteran of the surveillance industry. He has conducted and /or supervised more than 5,000 surveillance private investigations cases to date. Barry has owned and operated his own firm, now called Impact Due Diligence, since 2001. He lives in the Metro Boston area with his wife and three children. Feel free to connect on LinkedIn.