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Insurance Agent Fraud

Written by Michele Wilmonen. Posted in Research Last Updated: 10/24/2011

When purchasing an insurance policy you have to be wary of insurance agent fraud.

Insurance Agent Fraud

Becoming a victim of insurance agent fraud can be prevented if you are careful.

The sad truth is that you can really trust no one these days. Gone are the days of being able to seal a business deal with a handshake and gentlemen’s agreements. Now we have to have legal contracts drawn up and signed by all parties involved.

Even in the field of insurance the one person that you are supposed to be able to trust with your money, your agent, can fail you. More and more we are hearing about agent’s being arrested or under investigation due to fraud. Most of the insurance agent fraud is agents keeping insurance premium that is paid to them from their clients and not sending it to the insurance company.

Statistically there are more agents out there you can trust than the ones that are committing the fraud. It is still always a good idea to protect yourself from insurance agent fraud though.

When Purchasing Your Policy

If you opt to buy a car insurance policy from an agent, never walk out of their office empty handed if you have given them money. The ideal situation is to walkout with temporary insurance cards and even possibly a printout of the declarations page of the insurance policy that you just purchased.

If you can’t get the printout of the declarations page, you need to at least have a receipt and the temporary proof of insurance. If you are provided with anything less than this; you should be worried about insurance agent fraud. The agent has given you no proof that you purchased anything and can easily keep the money without anything in return to you.

Have Mail Sent to You

Never have your mail from the insurance company sent to your agent. Yes, some people actually do this.

This increases the chance of insurance agent fraud as you won’t receive the mailed information from the insurance company about your policy. This includes missed payment notices, policy cancellation notices and changes to coverage levels. All of which would alert you to the possibility of insurance agent fraud if you had been making your payments on time to your agent and had never requested any changes to your policy.

Get a Receipt

Whenever you make a payment at your insurance agent’s office always get a receipt. You need to keep proof that you have been making payments in case you are a victim of insurance agent fraud. So if you have an accident, you will have proof that you had been paying for your insurance coverage.

If your agent refuses to provide you with a receipt, do not make the payment to them. Instead contact the insurance company directly about the situation. While you the insurance company on the phone check to make sure that any other payments you made to your agent made it to them.

If you Suspect Insurance Agent Fraud

If you believe that you are a victim of insurance agent fraud contact the Department of Insurance or Insurance Commissioner in your state. They are going to ask you what proof you have so it is a good idea to have the evidence of the suspected insurance agent fraud in front of you. If they feel that you have a valid complaint of insurance agent fraud, they will advise you as to the next steps you need to take.

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Michele Wilmonen

Michele’s first introduction to insurance was working for a major insurance company as a file clerk and a mailroom supervisor in a regional office. She learned insurance directly from underwriters and claims adjusters from questions and also watching them do their job. Since then, she’s earned a number of insurance certifications from the Insurance Institute of America and also a Bachelor’s degree from the University of Idaho. She blogs at Car Insurance Guidebook.

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