If you have a car, it is very likely that you have auto insurance that covers you in case of an accident, but do you know if your insurer is legitimate? Have you verified their license as an insurance agent? Company is legitimate and pays its claims? These are some questions you should ask yourself before buying a policy so as not to fall into fraud and put your family and assets at risk.
Insurance fraud occurs when an insurance company, agent, adjuster, or consumer deliberately deceives for an illegitimate gain. It can occur during the process of buying, using, selling or underwriting insurance.
In many cases, victims do not realize they are being scam until they file a claim and discover that their policy is invalid or the company simply “doesn’t exist” anymore.
Start by looking up the number of complaints from the insurer and how quickly they were resolve, Insurance Fraud Schemes According to the Texas Department of Insurance (TDI).
Insurance without a license
It is illegal to sell insurance in Texas without a license. Unlicensed companies often don’t meet the state’s minimum financial requirements and may not have the money to pay claims. The company will collect your insurance premiums and may even pay some small claims so you continue to pay your insurance premium. Then, when you have an expensive claim, the company could disappear, leaving you with no coverage and expensive bills to settle.
Consumers and small businesses that have difficulty finding or affording insurance may be vulnerable to these schemes.
Prevention tips
Make sure your insurance company is license or register to sell insurance in Texas. You can find out the status of the agent’s or company’s license by calling the Texas Department of Insurance (TDI) Consumer Help Line at 800-252-3439.
When checking a company’s license status, make sure you know the exact name of the company. Unlicensed companies often use names similar to the names of licensed companies. If you find even a small difference between the name provided to you by the company and the name on TDI’s records, notify TDI immediately.
Additional recommendations to avoid fraud
- Be careful with charges that are excessively low. A few plans guarantee broad inclusion at an extremely low cost. You can for the most part set aside cash assuming you shop cautiously, yet be careful with any arrangement or strategy that costs fundamentally not exactly the others you’ve recorded.
- Get specialist and company data from TDI. Notwithstanding the permit status, check the organization’s grumbling rate and FICO score. The pace of grumblings and level of monetary dissolvability show on the off chance that an organization offers great client support and in the event that it is monetarily stable.
- Take as much time as is need. Take constantly you really want to purchase any sort of protection. Give no specialist or organization delegate pressure you access to going with a choice. Be careful assuming the specialist is hesitant when you get some information about estimating, inclusion, or installment plans.
- Continuously pay with a money order or Visa. Check and Visa installments can be follow and confirm. Assuming that you pay in real money, ensure you get a receipt that shows the name of the organization, the date, and the sum you paid.
- Be careful with approaches that are offer house to house or via telephone. Unlicensed organizations frequently utilize these techniques to sell their items. Try to see whether the organization and specialist are authorize.
- Store and safeguard your protection records. Notwithstanding the actual strategy, keep a duplicate of any records that have been trade among you and the organization, like ads, receipts, and guarantee data. Likewise keep notes of any telephone or in-person contact with the organization, including the name and title of the individual you talked with, the date, and information exchanged.
- If you know or suspect someone has committed insurance fraud, Texas law requires you to report the fraud within 30 days. The law protects you from any retaliation or liability for reporting fraud.
