PROTECT YOURSELF FROM
In weak economic
times, consumers can avoid becoming victims by staying vigilant and
knowing their options
KANSAS CITY, Mo. (June 9, 2009) - Insurance
fraud has become a nationwide problem, highlighted by recent scams
in such states as California, New Jersey and Florida. In today's
unstable economy, insurance fraud has the potential to get even
worse as consumers may be looking for ways to cut down on their
insurance costs. However, taking a shortcut when it comes to your
insurance could prove catastrophic and costly.
policy without thoroughly researching it could leave consumers
susceptible to insurance fraud, according to the National
Association of Insurance Commissioners (NAIC). Selecting the
cheapest policy available without first checking into the agent or
company could potentially leave consumers without any legitimate
"What seems too good to be true often is," said
NAIC Chief Executive Officer Dr. Therese M. (Terri) Vaughan.
"Consumers need to be extremely careful not to take a shortcut with
their insurance, which, in the long-term, can affect the safety and
security of themselves and their loved ones."
companies and dishonest insurance agents can defraud consumers by
collecting premiums for bogus policies with no intention or ability
to pay claims. Phony home, health, life and auto policies typically
are offered at rates that are significantly lower than the
traditional market price in order to woo consumers who are trying to
But consumers can rely on their state insurance
commissioners to actively protect them against fraud."State
insurance regulators are always on the lookout for these individuals
and companies," continued Vaughan. "Consumers can always protect
themselves through proper research and
Verify the Provider
purchasing a new policy, the best way consumers can protect
themselves is to research the insurance company and to read the
Explanation of Benefits (EOB) to familiarize themselves with their
coverage and confirm that their policies provide the coverage they
need. For help with your research, consult the NAIC's Consumer
Information Source to review the company's financial and claims
history. To use this free resource, go to https://eapps.naic.org/cis/.
If you are unsure about the insurance company or agent you are
- STOP before signing any paperwork or writing a check.
- CALL your state insurance department, which is easily reached
- CONFIRM that the company or agent offering insurance is
legitimate and licensed in the state.
Go to www.naic.org/state_web_map.htm
for a link to your state insurance department's Web
Watch for Hidden Fraud
legitimate insurance companies can also deceive consumers for
personal gain. For example, an unscrupulous agent could collect
premiums from a customer without delivering the insurance policy to
the company. The insurance company could cancel or refuse to renew
the policy. Signs of fraud with reputable companies include the
failure to receive an insurance identification card or a copy of
your policy in a timely manner. If you have questions or concerns,
contact your insurance company directly or call your state insurance
department for assistance.
Report Suspected Insurance Fraud
believe you have been a victim of insurance fraud, or if you are
aware of an instance of insurance fraud, it is important to report
- Contacting your state insurance department to file a complaint
against the insurance company.
- Visiting www.naic.org and
completing the form provided by the Online Fraud Reporting System
(OFRS). Through the OFRS, consumers can take a proactive role in
identifying and reporting insurance fraud.
Get More Information
Consumers can always get
more information or explanation about their insurance policies from
their state insurance department. Visit www.naic.org to find answers to your
questions or to find contact information for your state insurance
Get smart about your insurance needs. For more
information about auto, home, life and health insurance options - as
well as tips for choosing the coverage that is right for you and
your family - visit www.InsureUonline.org.
About the NAIC
Formed in 1871, the National Association of Insurance Commissioners
(NAIC) is a voluntary organization of the chief insurance regulatory
officials of the 50 states, the District of Columbia and five U.S.
territories. The NAIC has three offices: Executive Office, Washington,
D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office,
New York City. The NAIC serves the needs of consumers and the industry,
with an overriding objective of supporting state insurance regulators as
they protect consumers and maintain the financial stability of the
insurance marketplace. For more information, visit www.naic.org.
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