Avoid Being Victimized By Fraudulent Insurance Companies

“Insurance fraud” is commonly conceived as a homeowner staging a burglary in order to collect reparations from the insurance company, or a business owner burning his or her facility to the ground to do the same. Unfortunately, this dilemma works both ways. Insurance fraud occurs across all insurance sectors. These fraudulent companies operate through mail proposals, magazine or newspaper advertisements, public notices and the internet. If your budget is tight and you’re looking for a good deal on an insurance plan, here are some ways you can avoid becoming a victim of insurance fraud:

  • Carefully examine all documentation – If you’re considering buying insurance over the phone or internet,
    don’t offer your credit card information until you’ve requested and received written documentation describing the company. Legitimate insurance companies will always reveal their name, telephone number and address on this documentation.
  • Inspect their website – If you are unable to find valid contact information or an address on the company’s website, do not purchase insurance from them. Again, a valid insurance company would have no reason to avoid disclosing this information.
  • Carefully investigate “discount” health plans – While some of these discount plans may be marketed to appear like legitimate insurance plans, they are not. Authorized discount plans can be found on lists registered by the Division of Insurance.
  • Confirm valid licensing – Before making any purchases, it is imperative that you confirm that the insurance company is licensed. It is always a good idea to make sure the insurance offered to you through a job is licensed as well. Don’t be fooled by professional-looking websites, business cards or letter heads.

The North American Industry of Commissioners (NAIC) has established a “Fight Fake Insurance” program to protect us from fraudulent insurance companies. They’ve created a system through which legitimate insurance companies and consumers can report suspected cases of fraud. In 2010, over 130,000 insurance fraud cases were referred from insurance companies, law enforcement agencies and consumers. Of these, some 44,000 were investigated, which lead to about 4,000 arrests.

The NAIC also maintains a national database that monitors legal actions and activities involving insurance companies and state fraud departments have hired criminal investigators to specifically handle antifraud cases. Our skilled team of Texas bad faith insurance attorneys is familiar with the workings of these fraudulent companies and we hold them fully accountable in court. However, these cases can be avoided if you are careful in purchasing from a lesser-known insurance company.

If you suspect you have been duped, contact the Texas insurance department and they will fverify whether or not the company at question is even authorized to sell policies. If you have been swindled, it’s important to contact one of our Beaumont bad faith insurance lawyers immediately. Purchasing a fake insurance plan can put your savings and health at risk. If you suffer an accident and are having to pay your medical bills out-of-pocket because you signed up with a fraudulent insurance company, you deserve to be compensated.