Preventing Insurance Fraud: How to Protect Yourself in 2022
- Written by Lilly Miller
Insurance fraud is a big crime with many victims in it that demand and deserve justice. Insurance fraud can victimize any person, resulting in higher prices of premiums, goods and services. It’s very hard to estimate the exact damage of insurance fraud, some of it due to its vast extent, but mostly because people don’t report the crime. If you want to make sure all those scammers are punished and left without work and commission, it’s important to learn how to choose the right insurance, no matter if you`re insuring a tow truck or a family house, how to recognize fraud and how to get your share of reward and compensation in case you become a victim of fraud. It’s all much less complicated than it sounds, so let’s begin with the basics:
Learn the basics
Before you start learning about insurance fraud, it’s important to get a refresher on some insurance terms. For instance, your insurance premium rates are based on your previous history with claims, as well as the amount of risk you carry with your coverage. In most cases, of course, the more risk you carry, the higher the premiums. Let’s say you own a Ford pickup, one of the most stolen vehicles. In that case, you can expect your car insurance premium to be higher than that of a Tesla (statistically the least stolen car). Also, if you’re a firefighter or motorcycle racer, expect to pay higher premiums for life insurance than an accountant. There are many more elements to calculating premiums, so make sure to study them all and prevent surprises.
Ask for the agent’s ID
Even now that you know what to expect when buying insurance, don’t think you’re safe from being scammed. There are agents and companies out there who sell you insurance, and only after you try to file a claim, you discover that your insurance has no coverage. And if you, your home or your vehicle gets damaged without any insurance to help you out, you have to make all the payments yourself and give any money you owe to mortgage holders. For that reason, it’s important to only deal with agents and companies that hold valid licenses. It’s also smart to study the records of the agency you want to do business with and make sure they have plenty of experience behind them (at least 10 years in the business).
Check for junk insurance
One of the most common and most commonly overlooked types of insurance fraud is something called “junk insurance”. Only in Australia, there are reports of major companies ripping off thousands of customers by selling them unwanted and unnecessary insurance products in a package with other services. And this happens all over the world! These junk insurance products are useless and designed to basically take money from uninformed customers. So if you’ve ever purchased a car on finance or own a credit card, and even a personal loan, there’s a possibility you’re still paying for junk insurance that’s costing you thousands of dollars. Luckily, there are experienced companies dealing with junk insurance claims that can check your documents for free and help you take appropriate steps to get your money back from these scammers. And thanks to these professionals, you will never fall for junk insurance again!
Never pay in cash
Certified insurance agents don’t need any cash from you—it all goes through checks and accounts. And when you’re writing a check, check the details with the customer care center to prevent the agent from depositing the funds and scamming you out of your insurance. All the details from the check should belong to the insurance company and not an individual or a private firm.
Study the copy of your policy
When you settle on a company and policy, the agents are obliged to provide you with a copy of your insurance policy, together with all documentation that outlines your coverage. If you don’t receive your copy, don’t hesitate to call your insurer and ask about this issue. If they don’t provide you with a clear explanation, you can contact your local department of financial services, because there’s a chance that you don’t really have the coverage you paid for.
Keep the details of your policy private
There’s no need for any third party to know about the details of your insurance policy. In some cases, fraudsters choose to come to your door, posing as insurance agents or consumer rights personnel and asking you many things about your policy. Sometimes they can call and say that they are calling from the service center and ask for any insurance policy complaints. If that happens, be on alert and don’t disclose anything.
Even the best of us fall for insurance fraud, there’s nothing to be ashamed of. If you’re ashamed, you will most likely not report the crime and let the criminals get away with it. Now that you know all about insurance fraud and how to avoid it, you’ll most certainly have more confidence to choose the right coverage, stand up to bullies and report fraud when you see it.