Below are some tips to insure you
are not being taken advantage of when purchasing
insurance.
-
Make sure that an agent or company
is licensed within your particular state. Many
dishonest agents will falsely insist that Federal
law (Employee Retirement Income Security Act
- ERISA) exempts them from being
state-licensed
because of the type of insurance plan they
are trying to sell. Although this act may allow
certain individual employers, unions or associations
to create self-funded health plans that are
exempt for state regulations, this coverage
is not sold through agents. Agents need to
be licensed. Extra care should be taken if
the insurance company name is unrecognizable.
Verify the insurance company with either the
State Insurance Department which issues licenses,
or A.M. Best or Moody's, to check on the financial
health of the company.
-
Check with the Better Business
Bureau or a local consumer assistance agency
to see if the agent has complaints filed against
them.
-
Pay premiums by check or money
order. Never pay in cash.
-
Make checks payable to the insurance
company and not the agent or agency.
-
Question any bill received from
an agent for a premium installment that is
received after the first payment has been made.
Normally the insurance company or premium finance
company handles the billing.
-
Get receipts as well as copies
of every paper signed.
-
All coverage should be paid for
only after all documents are completely filled
out.
-
It is the responsibility of each
policyholder to fully understand what coverage
is included and exactly what the cost for that
coverage is.
-
Be aware that if an agent or
company representative seems evasive or cannot
answer questions there is a strong possibility
that fraudulent activity is involved.
-
Never, under any circumstances,
sign a blank insurance form or give an agent
a power of attorney to sign an insurance application
or buy coverage.
-
Contact the insurance company
if you have a policy that has not been received
within 60 days of sending in the application
form.
This information came from many different
Web sites and sources, among these are:
The Department of Criminal Justice/Office
of the Insurance Fraud Prosecutor
The Coalition Against Insurance Fraud - Web site
and newsletters
The New York State Department of Insurance - Annual
Reports on Fraud
The South Dakota Division of Insurance, Insurance
Fraud Prevention Unit
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