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6 Common Insurance Scams You Need to Be Aware of

Dec 16, 2021

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6 Common Insurance Scams You Need to Be Aware of

Scams disrupt various industries, including insurance. It's common for consumers to be curious about how to cut monthly bills. However, little do many people know that insurance policy scams can drain their cash and give them nothing in return. Below are some of the most common and crafty insurance scams used by con artists that you need to be aware of.

    1. Fake Insurance -

      One of the most obvious insurance policy scams to spot is an outright fraudulent fly-by-night operation. Beware of insurance agencies you've never heard of that make incredible claims, such as an upfront payment of $50 that would cover a wide range of risks for a year. Insurance companies are in business to make a profit, so don't be fooled by those that pose to be exceptionally charitable.

    2. Premium Theft

      Sometimes, a legitimate company and policy can be pitched and manipulated by a rogue employee who hates their job. These employees commit fraud by stealing from their own company and transferring money to their personal accounts. So track your payment history closely no matter who you choose as your insurer. Regularly updating your records will reveal what you're actually being charged versus what you think you're being charged.

    3. Change in Policy -

      It's difficult to avoid the constant bombardment of online ads and junk mail people see daily. It's common for new insurers to go after existing insurance clients and lure them away to sign up for a new policy. However, before you even think about switching, ask yourself if you really need to make a change. If everything is working fine with your current policy, don't create a potential disruption for yourself by switching to a new company. Remember, you don't have to respond to anyone's high-pressure marketing.

    4. Hidden Expenses -

      Insurers have used various methods to hide charges until it's time to pay. If a company is playing tricks with your perception of pricing, it means you should move on to a more reputable insurer. Transparency is now a huge factor among consumers empowering them to know which brands to trust.

    5. Dishonest Advertising -

      It's common for insurance agents to avoid discussing or emphasizing policy disadvantages. That's why you need to be prepared with your own list of questions when you meet with a potential insurer. Never assume every insurer has your best interests in mind. The bait and switch trick still exists today in which a company lures you in for one reason, then hits you with different prices you didn't expect. Another form of false advertising is just a flat-out lie that says what an insurance policy covers, yet the insurer is stacked with excuses not to pay when it's time to discuss a claim.

    6. Deceitful Investments -

      Some insurance policy scams promise high returns to "investors" who pay into a monthly plan. The concept of duping investors with fake accounts was championed by Wall Street's Bernie Madoff for awhile until he went to prison. Some insurance scammers offer promissory notes that assure high returns in a short period. Know what you're getting into because anything that sounds too good can often be an illusion.

Don't let scammers trick you into signing up for an insurance policy that isn't legitimate or doesn't deliver what it promises. That's why it's a good idea to read online reviews of a company before you risk spending money on an unknown brand. Contact us today at Fuller Insurance Agency to set your business up with the right insurance plan.

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