Tips for Avoiding Insurance Scams
It can be rather profitable to be a successful insurance scam artist. In fact, car insurance scams are more common and aggressive than you may think. Experts estimate that car insurance scams account for 20 percent of bodily injury and 10 percent of property damage claims.
While the scam artist is after money, the victim and the insurance company may experience several long-term ramifications, including:
- Legal issues
- Higher premiums
- Accidents on a driving record
- Million-dollar payouts for planned accidents
- Annual $200 to $300 costs for all policy holders
To avoid falling into a criminal’s trap, look for the following signs that an insurance offer you have received is fake.
Insurance That’s Too Good to Be True
When it comes to insurance, deals are possible but premiums that are far below what you should be paying should be questioned. While the low cost might tantalize you, know if you’re being scammed into false or insufficient coverage by understanding:
- How your own risks and individual claims history factor into your premiums. If you look to be a higher risk – for instance, you’re young or have several accidents on your record – realize your premiums should always reflect this.
- Know if your vehicle is associated with certain risks, including its model and use.
- You don’t have to go with one offer from a specific agent or carrier. Always shop around.
- You shouldn’t always trust an agent or broker. In addition to comparison shopping, research the individual and request that he or she show proof of licensure.
- If premiums seem especially low, you could be on the hook for high out-of-pocket costs.
One common insurance scam involves a supposed agent who says he is starting a policy in your name and then collects your monthly premiums. It’s only later – for instance, when an accident happens – that you find out your policy is a sham.
As you go through the first steps of securing coverage, it’s always good to get proof. First, make sure your payment is made out to an insurer or an agency – never an individual – and get a receipt for each payment.
Then, make sure your agent or broker provides you with a copy of your policy. Understand that this document must detail what’s covered, what is not and your policy limits. If your insurer, agent or broker won’t provide it and can’t explain the delay, reach out to the Department of Financial Services.
Go Through Your EOB
When you have health insurance, you should receive an explanation of benefits (EOB) every time you go to the doctor, have a medical service performed or lab work done. Once you receive the document, always go through each line item, looking at how much you paid, what was applied to the deductible and the service requested.
Health insurance scams are unfortunately common, with hospital employees using your coverage for their own benefit, someone stealing your health insurance information or staff attempting to bill you for services you never received. If you notice false charges or incorrect services, contact your insurer to report the discrepancies.
Know the Signs of an Auto Scam
Innocent drivers often fall prey to scam artists out on the road. You may be intentionally hit by another driver, find yourself in a staged accident or may deal with a driver possessing fraudulent insurance information. How do you know you’re getting scammed?
- Staged rear accidents happen when a vehicle, usually filled with a large group, suddenly stops right in front of you to cause an intentional collision. Then, they’ll attempt to direct you to a medical facility, shop facility or law office, where other individuals are in on the scam. There, the supposed employees may recommend costly services.
- Runners target the injured victim in an accident, attempting to get them to a particular emergency room, doctor or law firm to use a specific service. Runners may appear associated with towing companies, auto body shops, attorneys or doctors, but their recommendations are for unfamiliar businesses that over-charge you for basic services. As a solution, only accept help from people or places you call.
- At the scene of an accident, the party hit inflates the damages that occurred and may even work with an auto body shop to exaggerate the repairs their vehicle needs.
- The driver or victim hit refuses to call or speak with the police.
In addition to using your own judgment, always take notes and pictures at the scene, get the other driver’s personal and insurance information and contact the police.
To ensure you have a reputable agent, shop for auto and health insurance policies through Ion Insurance. To learn more, give us a call at 203.729.5261.