How to Avoid Insurance Fraud

Independent Group Agency

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Nov 22, 2013

Insurance fraud has been around for decades and produces some interesting stories, such as the tail of one man who buried his entire car in his back yard to file a claim that it had been stolen. When the police dug up his vehicle using a backhoe, the man was arrested for insurance fraud.

Committing insurance fraud is not the real issue threatening Americans in today’s world. Instead, the real threat comes from falling victim to insurance fraud and paying premiums, down payments, and fees to scammers and criminals posing as legitimate insurance salesmen.

These fake insurance companies, often composed of one individual or a small group of thieves, can wreak havoc with entire populations who incorrectly trust them with their insurance needs. After collecting the money, thieves shut down contact with their victims, and innocent people are left without insurance and without the hundreds of dollars they have paid for that “insurance”.

Insurance fraud in this regard has seen dramatic growth in the past few years and looks to continue its increasing trend in the near future. People should take the steps to arm themselves against purchasing fake insurance by remembering a few of the following suggestions:

1. Make sure the insurance company or broker is licensed to sell insurance by the state in which you live.

2. Make sure the insurance company or broker is licensed to sell the form of insurance you are trying to purchase.

3. Try to meet the insurance representative in person, in his or her office.

4. Ask for legal documentation and read the entire document.

5. Take advantage of a trial period, as most legitimate companies will allow such a period of time.

6. Check with local authorities and the Better Business Bureau to see if the insurance company is registered to do business in the state in which you live.

By following these tips, you will be better equipped to determine whether your insurance representative is real or fake.

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