Insurance companies investigating fraudulent claims often seek an insured’s cell phone on the grounds that the data contained therein is material to its coverage investigation. The GPS data on the insured’s phone may provide evidence regarding the insured’s location at the time of the loss. The text and call history could also provide information helpful to the fraud investigation. Realizing the potential incriminating evidence that could be obtained through his cell phone, an insured might “lose” his cell phone. What consequences might a court assess because of an insured losing his cellphone or otherwise failing to preserve the cellular data? A federal court has answered that question, holding the insured can be sanction for spoliation of the evidence.
