Insurance Fraud Issues
by Megan Mahan
DENVER-March 29, 2006-While the month of March has been declared Fraud Prevention Month by both the United States and Canadian governments, InsureMe, a leading online insurance shopping service, is encouraging consumers to be on the lookout for insurance fraud all year round.
Insurance fraud has been on the rise in recent years, according to the Insurance Information Institute (I.I.I.) and costs consumers approximately $30 billion each year.
To save consumers the financial misfortune of dealing with fraudulent insurers, InsureMe recommends that consumers investigate both the insurance agent and the insurance company before signing a policy.
"Many consumers aren't aware that agents are required to obtain appropriate licensure through the state Department of Insurance (DOI)," says InsureMe CEO and insurance agent, Tim McTavish. "Consumers can contact the DOI to verify that their agent is in fact licensed and legitimate."
Consumers should also make use of independent rating agencies like A.M. Best that maintain a database of complaints and criticism of insurers nationwide.
In addition to researching an insurer's credentials, policyholders should keep track of premiums paid by holding on to receipts and policy statements. Policyholders are also advised to never make out a check directly to their agent or broker, no matter what the circumstance.
Reporting insurance fraud is central to stopping it, experts say. The National Insurance Crime Bureau (NICB) has an insurance fraud hotline available to consumers 52 weeks out of the year, at (800) TEL-NICB. Alternatively, consumers can report insurance fraud to their state DOI. Both organizations (NICB and the state DOI) have online resources available to consumers as well.
Consumers can also curb insurance fraud by representing themselves truthfully. Policyholders should refrain from filing exaggerated claims and underreporting factors like health conditions that insurers use to determine rates and adjust claims. Misrepresentation alone costs American households around $300 per year, according to the NICB.
