Final answer:
The first step for an insurance company when their policyholder is at fault in an out-of-state auto wreck is to contact the policyholder and gather pertinent information before taking further actions such as resolving the claim.
Step-by-step explanation:
The typical first step for an insurance company when their policyholder is at fault in an out-of-state auto wreck is to contact the policyholder and gather information. This involves confirming the details of the incident, understanding the circumstances that led to the accident, and determining the extent of the damages and liabilities involved.
The insurance provider will not immediately deny the claim, notify the other party's insurance company, or file a lawsuit against the other driver without first collecting the necessary information to assess the situation accurately.
Insurance companies operate with imperfect information, and predicting future events like auto accidents with certainty is not feasible. In the case of a car accident, understanding the policyholder's perspective is crucial, as the individual may have insight into the risk factors that were present during the incident.
Once the insurer has a clear picture of what occurred, it will proceed with the claims process and take the appropriate next steps, which might involve contacting other insurers, assessing fault and damages, and ultimately resolving the claim.
Therefore the correct option is b. Contact the policyholder and gather information.