Claim Decisions Made Too Late

October 7, 2026 / 4 min read

In the auto claims world, how often do we hear, “We need to mitigate overall claim expenses”? With the surging cost of claims payouts, claims teams are looking to save money any way they can.

Auto claims adjusters know well the potential consequences of a wrong decision: an allegation of bad faith that may cost millions of dollars. All those zeros tacked onto a settlement gets claims leaders’ attention. With the surging cost of claim payouts, it’s a risk that organizations can ill afford.

women-inspecting-car

But what happens when making the right decision still costs a company a few hundred or a few thousand dollars because the decision took too long? Examples include a car sitting in a tow yard for an extended period, a lienholder discovered late in the total loss process, or a missed subrogation opportunity.

The adjuster can do everything correctly on paper, but the delay may still cost the company because the necessary information wasn’t available sooner. Multiply those smaller, avoidable expenses across the millions of auto claims handled each year, and the financial impact can become significant.

Tow and storage costs found too late

Getting a vehicle out of a tow yard quickly, or sending a letter to the insured or claimant advising that storage charges will no longer be paid after a certain date, is a significant cost-saving opportunity for any auto property damage unit.

When I worked as a claims manager in South Florida, my team members were no strangers to large tow bills. Adjusters often don’t learn about a loss on the same day or even the next day. In some cases, they may learn of a loss ten or more days after the fact when they receive a letter of representation from an attorney.

In large cities, storage alone can cost $75 to $100 per day. Those fees can quickly exceed $1,000 if the vehicle isn’t moved, on top of other charges associated with towing and storing the vehicle.

What if a claims team had a solution to give notice upfront that a vehicle was towed after a loss, helping them minimize daily storage fees? Verisk’s Claims Coverage Identifier can now identify those vehicles faster and provide adjusters with the name and phone number of the towing company, as well as the date the vehicle was towed. Adjusters can contact the towing company, obtain current storage costs, and move vehicles sooner to mitigate expenses earlier in the claims process.

Lienholder discovered late in the total loss process

According to Experian’s State of the Automotive Finance Market Report: Q2 2026, more than 83% of new vehicles are financed or leased. This means a lienholder is highly likely to be a party to a total loss claim. Identifying a lienholder as early as possible in the process not only helps mitigate storage costs but also helps reduce extended rental expenses and identify the correct party to pay.

Total loss teams struggle every day to determine the correct payee for a total loss. Depending on the vehicle’s value and whether there is a lien, the total loss settlement can be paid in three different ways:

Directly to the insured or claimant if there is no lien.
Partially to the lienholder and partially to the insured or claimant if there is equity in the vehicle.
Directly to the lienholder if there is no equity in the vehicle.

If a total loss adjuster pays the full settlement to the insured or claimant when a lienholder is involved, the company may be responsible for an additional payment to the lienholder, potentially costing thousands of dollars. This is why identifying a lienholder early is critical to the total loss process.

Claims Coverage Identifier can now identify vehicle lienholders faster, helping adjusters obtain letters of guarantee and begin the total loss process sooner. In addition to the lienholder’s name, Claims Coverage Identifier provides the account number, phone number, and address when that information is available.

Missed subrogation opportunities

Whether a subrogation file is handled in-house or by a vendor, there’s a risk of missed opportunities and additional costs. How many files hit a roadblock because a party can’t be located for subrogation? What does it cost your company to pay a vendor to handle a subrogation file? Combined, these issues can cost millions of dollars each year.

Claims Coverage Identifier can provide up to seven years of policy history for a vehicle or person. Even if an insured is only able to obtain a license plate number at the scene of an accident, this single data point can be enough to order a Claims Coverage Identifier report, which may provide registered-owner information, contact details, prior claims history, and up to seven years of policy history. That information can help claims teams identify potential recovery paths earlier and determine which files can be pursued internally versus those requiring additional support.

Earlier information leads to better decisions

What’s the common theme? Delayed decisions by a claims team can add significant costs for a carrier, even when adjusters ultimately make the right decisions. With Claims Coverage Identifier, claims departments have earlier access to data that can help adjusters make informed decisions sooner.

Claims Coverage Identifier provides the following capabilities to support these decisions:

Registration information directly from the DMV
Contact information
Prior claims history
Seven years of policy history
Lienholder information
Towing insights
Lien sale data
Prior vehicle salvage history
Expanded coverage and policy intelligence

The opportunity isn’t simply to make better decisions. It’s to give adjusters the information they need to make those decisions sooner.

Discover how much time and money your claims department could save by using the Claims Coverage Identifier Savings Calculator.

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The Cost of Delayed Auto Claim Decisions: Fighting Back With Data

Tow and storage costs found too late

Lienholder discovered late in the total loss process

Missed subrogation opportunities

Earlier information leads to better decisions