With so many important decisions being made via internet information, consider some of the following items to be sure you don’t become a victim of insurance fraud.
Be careful you don’t get drawn into a glossy, well designed web page without checking the source from which the web page was generated. Some scammers are very well versed in how to create a web page to make it look legitimate. They are particularly adept at getting your attention with ads which promise major savings in insurance premium and with frighten you into believing you’d better sign up now in order to get the special premium quote being offered. Does the phrase “hurry, this offer won’t last long” sound familiar?
It is vital you keep yourself well informed as to companies who are duly authorized insurance providers. The one way to be certain is to check with your state Department of Insurance for companies who are licensed in your state to transact business. The website insuranceguidelocal.com/ will give you detailed information regarding insurance. Simply go to that site, click on “for consumer,” find the desired state, and click on it for the insurance commissioner. This will allow you to access the information you need regarding licensed agents, legitimate insurance companies licensed in the desired state, and consumer reports on agents/ companies.
Make sure the agent you are dealing with is a licensed agent in your state. If your call is taken by someone over the phone, make sure you find out if they have authority to bind coverages they will be quoting and to provide you with proper evidence of insurance. If they are just a person authorized to give a quote, make no commitment to them regarding your intentions to purchase. If they are legit, make sure you get agent’s full name, state license number, and company he or she represents. With that information, it only takes one more phone call to verify you are doing business with an authorized solicitor. A purchase of this magnitude and importance deserves more than just 10 minutes for quote.
When you do purchase your insurance through an email transaction, as soon as you receive your notice of coverage, call the issuing company to verify the policy contract does indeed have their stamp of approval. If the issuing agent gives you a receipt number or a policy number, that receipt or policy number being assigned by the issuing company should be available.This step may not be so important if you are sitting in an office where you are transacting the business because you can eyeball the agent, see him or her sign the application and issue you a receipt showing the date coverage goes into effect. Chances are in your favor in that setting to know agent is not a scam artist and does have agent binding authority.
When you have determined what coverages you desire and the application is completed, tender payment to the company issuing the policy. Never make your check to the name of the agent you are dealing with. This is as much for his or her protection as it is for yours. Direct writers (agent) do not have permission from their company to collect premiums in their name, keep proper commissions, and then forward premium to company. State laws are very specific about agents co-mingling funds, and the practice of doing so will cause the agents to lose their license and face prosecution. The circumstance is different for an independent agent, insurance broker, or insurance solicitor. Most of these have permission to establish a trust account they can use when transacting business where they can collect premiums, separate their commission, and transfer the balance. Even in that case it is wise to make the payment in the name of the trust rather than in the personal name of agent. Of course it goes without saying, if you are paying with cash be sure to receive a receipt which clearly spells out the purpose of the payment and for what coverage period is being paid for.
If you are dealing with an agent who tells you he or she will always make sure you are getting the lowest premium possible, be prepared for staying abreast of company you are being serviced by.
Sometimes at renewal your insurance billing may come in the name of a company you are not familiar with. This can be for several reasons such as: previous company had gone out of business for one reason or another; agent may have sold book of business so you are now covered by purchasing company; or, the agent is “churning” his or her book of business to take advantage of commission scales. This is a practice of moving existing policies to a new company which now pays a new business commission which is higher than renewal commission. Thank goodness most insurance agents are of the highest level of integrity but some have been known to “churn” their book of business. The switch may be perfectly legal and justifiable, but just be careful your coverage is maintained by a reputable insurance company and not some elusive organization. Make sure you do get a new policy and not just a receipt for premium paid. I know of two agents who are spending time at taxpayer expense in the Big House where they are getting three square meals a day and a place to stay out of the weather. The lure of easy money was just too much for them to withstand.
It was recently the Texas Department of Insurance who brought the issue of insurance scams to the attention of the people of Texas. Apparently, scam artists were giving quotes for insurance, collecting premiums, and never issuing policies to consumers. In many cases, the buying public was not aware of these scams until they were in an accident or when they called the company to verify coverage or to make a change in coverage.
The department felt something had to be done publically to make people aware of this growing problem. The people of Texas can be assured the Department of Insurance is taking seriously the motto “Don’t mess with Texas.” Hats off to them!
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