6 Simple and Useful Tips for Everyone to Avoid Insurance Frauds

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Insurance is a need. Unless you live in a utopian society where the state provides you with everything, you need insurance. You need life insurance; you need insurance for your car, for your home and for your business.

But choosing the right insurance policy can be hard, especially because there are many fraudsters in the guide of insurance agents who rip naive customers off.

Avoid Insurance Frauds

Here are the tips that you’ll want to follow:

Ask to compare

Tell the agent to compare his company’s policy with other policies.

Wondering why you should do that?

This stops the agent from making outlandish claims. Insurance agents often make claims that are half-true. They purposefully conceal information from their customers. Customers can extract information from them if they tell them to compare their policies with other policies.

Let’s say an insurance agency reveals the extra costs associated with deductibles. A customer can refer to this and ask the insurance agent whether his policy comes with any hidden cost. When confronted this way, agents are pressurized to tell the truth.

Additional policy coverage

This is a technique used by insurance agents to pocket commission. They sell customers additional policy coverage, which the customer may not even need in the first place. It’s called policy sliding.

How to make sure that your insurance agent is not aiming for policy sliding? Ask him to hand you all the papers. Then take those papers to your lawyer. He’ll tell you whether there’s any additional policy coverage.

Sliding is a fraud. If an insurance provider is accused of policy sliding and if the ensuing investigation proves the provider was guilty, it could end up losing its license.

Insurance churning

Akin to policy sliding, insurance churning is a method, using which dishonest insurance agents profit off of inexperienced customers. Insurance agents insist their existing customers to upgrade their policies. What they don’t disclose is upgrading the policy could cost you all the cash-value that you’ve built up over the years.

It’s happened with a lot of people. They felt surprised when they discovered their previous non-upgraded policy was more than sufficient. Upgrading translates to moving to a pricier plan, enabling the agent to earn more commission. So if the agent advises you to upgrade your policy, make sure it’s a useful advice and you really need to upgrade it.

Auto insurance scams

Auto insurance is susceptible to scams. Here are the top scame categories that every auto insurance buyer should be careful of:

  • Intentional crash: It’s also known as crash for cash. Insurance agents, with the help of their companies stage accidents, so that the customer is held responsible. In this type of crash, the driver deliberately causes the customer to hit the backend of his vehicle.
  • False representative: The insurance company might send a fake representative when a customer is genuinely involved in an accident. The representative sends the customers to a shoddy doctor or a repair-shop to squeeze money out of him.
  • Faking injury: In this type of scam, the fake victim shows up with false injuries. They often get sketchy doctors involved to buttress their claim.

Take help of an experienced attorney if any of these happens. Attorneys are experienced. They can identify whether the agent’s offer is genuine or fake.

Ask for receipt

Once again, a lot of people fall prey to it. Insurance agents convince them to the extent that they forget to ask for a receipt. At times, customers ask for a receipt but the agent tells him it’s not that important. Beware! If your agent tells you insurance policy receipt is not that important, he’s most likely to be a fraudster.

A receipt is the evidence that you have cleared the payment. Agents often discourage customers by saying getting a receipt will take days. While that’s true, the receipt is the proof you have a contract with the insurance company and the contract was realized by the agent.

Oftentimes, agents hand over receipts which were issued by fake companies. Make sure the receipt you obtain is from the company with which you are entering into the contract.

Up coding and documentation

Have your insurance contract documented and stop up coding. Similar to receipts, documentation is also a proof that the customer has entered into a contract with the insurance company. It also categorically states coverage and limitation. By having their policy documented, customers can prevent being billed for nonexistent services.

Documentation is essential for all those who are buying health insurance policies. It prevents up coding. In a technical sense, up coding is a situation wherein a person is billed for health insurance services he didn’t receive. When all the key details about the policy are documented, up coding is prevented.

Summing up

Insurance frauds amount to billions of dollars being siphoned off from public treasury and from people’s pockets. Following the six tips, discussed here in this article ensures that you won’t make mistakes and purchase the right insurance policy.

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