Tips for Avoiding Common Scams and Frauds in Insurance
As the demand for insurance policies increases across the globe, so do instances of insurance scams and frauds. Sadly, fraudsters are constantly coming up with new and innovative ways to steal our hard-earned money, which is why it always pays to be educated and alert. Scams might be common, but our behavior is critical in avoiding them. To that end, here are some of the most important tips you should follow in order to avoid common insurance scams and frauds:
Work with established providers
When selecting an insurance provider, it’s always recommended to go with the most trusted and reliable option. Most countries around the world have certain established insurers that have been operating successfully for decades, and there are even a number of reputable international companies you can choose from. While their policies might seem a bit pricier, you can be certain that you won’t fall victim to scams and fraud when working with such businesses. After all, it’s worth remembering that if an offer sounds too good to be true, it most likely is.
Ensure the agents are licensed
In the US, across Europe, and many other places around the globe, all insurance agents working for legitimate companies need to have appropriate identification as well. These agents undergo strict training, they need to acquire appropriate licenses, and they must have their ID on their person at all times. As a consumer, you also have the right to ask to see that identification. So, ensure every agent you work with is licensed, and consider writing down their details and calling the insurance company’s customer support to confirm their identity, as a precautionary measure.
Learn more about junk insurance
Even when you work with trusted and reputable providers, issues can still arise. For instance, it’s recently come to light that Australia’s biggest four banks have been deceiving consumers by selling worthless and unnecessary insurance products along with credit cards and loans. These products are known as junk or add-on insurance, and you should learn about junk insurance as well in an effort to avoid paying unnecessarily for similar products. This is why it’s crucial not to trust agents blindy, but rather read each document carefully and ensure you understand it fully before signing.
Fill in all paperwork yourself
Apart from reading all papers carefully, you should also make sure all documents are filled in by you to avoid insurance scams and frauds. This is crucial when you are purchasing policies online and in person, as it ensures you are signing only what you previously agreed to. Don’t forget to read the small print either, including the terms and conditions and the inclusions and exclusions. Check for any spelling errors, misrepresentation of facts, and withholding of information as well, to ensure all documents are real and legitimate.
Avoid paying for policies in cash
Insurance agents typically don’t ask their clients for cash. In general, insurance providers will accept checks, credit card payments, bank transfers, automatic payments, and similar solutions, but those transactions will go through the institution’s financial department instead of the insurance agent directly. In case you do need to fill out a check or transfer money, make sure to call the insurance provider’s customer support center beforehand. They will be able to confirm the necessary details for you and tell you exactly where funds need to be deposited, helping you avoid potential agent-related fraud.
Unfortunately, the world we live in is dangerous and the potential of becoming a fraud victim isn’t as low as it ought to be. But simply by paying attention and following the helpful tips mentioned above, you can easily avoid common insurance scams and stay safe.