Don’t be a victim: be alert for insurance fraud and scams

Especially in this tough economy, The National Association of Insurance Commissioners (NAIC) is warning consumers to keep their guard up to avoid becoming victims of insurance fraud. When it comes to insurance pricing, it’s best to adhere to the old adage of “if it seems to good to be true, it probably is.” According to NAIC:

“Fake insurance companies and dishonest insurance agents can defraud consumers by collecting premiums for bogus policies with no intention or ability to pay claims. Phony home, health, life and auto policies typically are offered at rates that are significantly lower than the traditional market price in order to woo consumers who are trying to save money.”

They suggest that if you are unsure of the company or agent that you are dealing with, take these three steps:

  • STOP before signing any paperwork or writing a check
  • CALL your state insurance department, which is easily reached by phone
  • CONFIRM that the company or agent offering insurance is legitimate and licensed in the state.

Here’s a clickable map to find your state insurance authority and here’s the NAIC Consumer Information Source, where you can file complaints or do research on company complaints and financial information.
It can also be helpful to keep informed about common fraud schemes. The Coalition for Insurance Fraud posts consumer insurance scam alerts and they feature a good list of insurance fraud links for consumers. The FBI also posts updates for common fraud schemes. Be sure to keep an eye out for your senior relatives and friends too – senior citizens are prime targets for various types of fraud, including insurance fraud.