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.

Careful what you Tweet – crooks could be using social networks, too

Millions of people are sharing real time activities with friends, family and colleagues through online social networks like Twitter and Facebook. If you are one among those millions, be aware that there may be some other parties that find your tweets fascinating, too … such as your local burglar. Recently, an active social networker Twittered about his trip only to find his home had been burglarized while he was away. While this could be coincidence, the victim thinks that it might be related to his public postings – and the news media seems to think so too – see a newsclip about the robbery.
There are likely to be many more reports of this incident since it is being heavily tweeted and it seems to have piqued the “mainstream” media’s interest, too. Although the media likes to hype stories about crimes related to online activity, these types of opportunistic crimes have been going on long before social networks existed. Wiley burglars are often known to target funeral goers based on obituaries printed in newspapers or after seeing families pack the car for a trip. With basic precautions, social networking may be no more unsafe than other “real world” activities. In fact, increasingly, social networks are being harnessed by citizens and police departments to help solve crimes.
So while this incident shouldn’t be blow out of proportion, it should serve as a cautionary tale of the potential downside of real-time transparency in social networks – particularly if you’ve attracted a following of people that you don’t know very well – or at all. Take sensible precautions and think twice about what and when you share – and with whom.
It’s also a wise to take home security precautions when you plan to be away on vacation – there are definite steps you can take to reduce the likelihood of your being victimized. And while nothing can take away the feeling of violation that happens after a burglary, being insured properly can help you to financially recover from a loss. If you have work equipment, antiques, or valuable collections, talk to your insurance agent about whether you need an endorsement or a rider to expand the coverage limits of your existing policy.