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What are the common signs of insurance provider fraud?

On Behalf of | May 19, 2023 | Insurance Law, Professional Malpractice |

Insurance could help protect yourself, your home and your family. It has played a crucial role in making financial security accessible to more people. However, specific individuals might take advantage of this demand to advance their selfish interests.

Unfortunately, insurance provider fraud exists despite efforts to regulate and standardize the industry. Certain firms might pose as legitimate insurance companies while going against state regulations and operating without proper licensing.

These illegitimate insurance providers also sell attractive products considerably cheaper than the standard market pricing. These features could already be red flags if you seek reliable insurance providers.

The following signs are common among fraudulent insurance companies:

  • The insurance agent uses limited offers to pressure you into purchasing immediately.
  • Premium payments are significantly lower than similar products from other providers.
  • It is difficult to find their contact details.

These signs are subtle, but noticing them could save consumers from problems later. Before purchasing any insurance products, consumers should verify the providers’ legitimacy by contacting the state insurance department. It could confirm if the business exists or has authorization to sell insurance.

Legitimate companies could still be prone to fraud

Even after confirming a provider’s credibility, their agents could still commit fraud using the company name. They might collect regular premiums from clients without sending the necessary documentation to their firm. If this happens, the provider could cancel the policy or reject its renewal.

Consumers should proactively track the receipt of their policies and accompanying documentation according to the correct timelines. Doing so could help prevent incidents of fraud. The law also has provisions against insurance fraud, allowing you to take legal action against violators.

Certain states have stricter policies and accessible portals, making it easy to report these incidents. Your financial security is a serious matter. Avoid fraud by being vigilant and attentive to your insurance policies.