Insurance fraud can happen any place and in any line of insurance, so savvy consumers need to remain aware of the risks and take steps to protect themselves, according to Nevada Insurance Commissioner Alice Molasky-Arman.
“If the insurance you buy is not legitimate, you may face hundreds or thousands of dollars in unpaid medical bills, repair costs for home or automobile, or to make up for life insurance that does not exist,” said Molasky-Arman. “If a company you buy from is unauthorized and unlicensed, no financial recourse exists if that company becomes insolvent, and individual consumers likely would be responsible for any claims expenses incurred.”
What is the best way to protect yourself and your family? There are several signs consumers should watch for, according to Molasky-Arman, but the first and best step to take is to contact the Nevada
Division of Insurance and make sure the insurance agent and the company you are dealing with are licensed in your state.
Potential signs of insurance fraud include:
• A policy costs far less than what other companies are charging. It’s good to comparison shop, but if a policy is significantly cheaper, beware. If it is too good to be true, it probably isn’t legitimate.
• An agent or company becomes evasive when you ask about state insurance licenses.
• An agent or company insists on cash payments.
• An agent or company tells you that this is a “one-time deal” or your “last chance for this special savings.”
• A company boasts that they will insure everyone, regardless of history or risks.
• An agent or company asks for detailed personal information that is not needed to write insurance.
Another point to keep in mind, Molasky-Arman added, is that in some cases unauthorized entities will recruit licensed agents to market fraudulent products. “Consumers need to remember to check the credentials of both the agent and the insurance company,” she said. “And, agents need to be careful of these unauthorized companies as well, because an agent can face loss of license, or possibly felony prosecution, if he sells fraudulent policies.”
Following are several other tips from the Nevada Division of Insurance to keep in mind when buying any type of insurance:
• Never pay for insurance until you are certain the agent and company are legitimate.
• Fraudulent policies are most often sold through direct mail solicitations or over the Internet, so be especially wary when responding to these solicitations.
• Always pay by check or money order, and write your policy number on the check.
• If you don’t receive your policy within 30 days, call the insurance company to make sure you are covered.
• Ask for a receipt for all payments. The receipt should include your policy number, the date of payment and the name of the insurance company.
• Finally, read the policy when you receive it. If you have any questions or concerns, contact your agent, the company or the Division of Insurance.
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