Identifying and Avoiding Seller Auto Insurance Fraud

Identifying and Avoiding Seller Insurance Fraud  

Call Auto Insurance Center we represent several quality Insurance Carriers..
When people hear about insurance fraud, they often think about buyer insurance fraud, or insurance fraud that is committed by a policyholder. Buyer insurance fraud includes any way in which a policyholder bends or breaks rules in order to increase their coverage and/or to claim more reimbursement from a claim than they are rightfully due.
This is a serious issue for many reasons, including the fact that it results in higher premiums for everyone. As individuals, the most important things that you can do are to report any known or suspected instances of buyer insurance fraud and (obviously) not to commit insurance fraud yourself.
Seller insurance fraud, on the other hand, is committed by the policy writer, and includes any way in which the policy writer bends or breaks rules in order to increase their profit.
Although most insurance companies and their representatives are legitimate, the threat of seller insurance fraud is real. However, it can be minimized by understanding some of the main ways in which it is committed and how to recognize warning signs of a bogus deal.
Common Types of Seller Insurance Fraud

•  Ghost insurance companies

In these situations, a policy is written by a company that is not licensed (or that doesn't even exist). The company accepts premiums without actually offering any coverage. This is an outright scam, and too often it isn't discovered until someone tries to submit a claim and discovers that there was never a policy in the first place.

• Theft of insurance premium payments

This sort of fraud is committed by an employee of an insurance company. In these situations, he or she would take the premium payment without applying it to the policy. This would frequently result in a canceled policy, which could have potentially disastrous consequences if the policyholder needed to submit a claim on a policy that has already been canceled.

• Over-coverage or under-coverage
  

In these forms of fraud, a policy writer knowingly sells someone a policy that either exceeds or fails to meet the customer’s needs.

As far as over-coverage is concerned, the cost to a consumer and benefit to the policy writer is pretty obvious.

Under-coverage, however, is just as fraudulent: in the interest of securing a sale, the company would market incomplete coverage as if it was adequate coverage, taking advantage of the confusion that many customers feel when trying to understand the details of an insurance policy.

How to Avoid Seller Insurance Fraud

Confirm that the company is legitimate.

Thanks to the Internet, it is easy to check to see if other people have lodged any complaints against a company, so that is an easy first step. If you have any doubts, check with the Better Business Bureau and your state’s insurance department to verify the company’s legitimacy.

• Shop around for your policies.

This is always a good idea, no matter what: obviously you want to get the best deal for the best coverage. Call Auto Insurance Centre we represent several quality Insurance Carriers..

However, there’s an additional benefit to gathering quotes from several different companies when you are shopping around for a new policy: if one company is charging either significantly more or less than other companies, it can be a red flag that something fishy is going on.

A related issue is to be sure that you fully understand the amount coverage that is being offered on all the policies that you are considering. Don’t hesitate to ask as many questions as you need to!

• Keep records of all of your payments, and verify that they have been received.

Nowadays, most people make their premium payments on line or with a credit card, both of which offer speedy confirmation that your payment has been processed by the company. If you choose to pay by another method, make sure that you retain all receipts and payment confirmations.

If you have started a new policy and haven’t received your insurance cards or a copy of your policy, investigate to make sure that your premium payment was handled correctly.

• Call your state’s insurance department if you suspect fraud. 

If you are ever uncertain about whether or not an insurance company is legitimate, go ahead and call your state’s insurance department with any question..

source About Money