Don’t become prey to insurance fraud. Read more and learn how to protect yourself.
Insurance fraud is not a new issue, it’s always been here and many have fallen victim to this deliberate deception perpetrated by insurance companies or agents for their financial gain. Insurance fraud may be committed in any stage of the transaction process, this can be from the applicants, the third-party claimants, policyholders, or other professionals who are providing services to the claimant. The insurance industry has over 7,000 individual companies that collect more than a trillion dollars from premiums each year. This huge amount of money makes the market susceptible to scams and other fraudulent activities.
In an estimate, about $400 to $700 is scammed from American families each year due to insurance fraud. That’s a lot of money taken away from innocent people. What are the most common insurance frauds that you should know about and therefore avoid?
Application fraud is also called material misinterpretation. It’s when the individual provides incorrect information to the insurance company when he/she applies for a policy. This type of scam is responsible for two-thirds of disputed life insurance claims. When applying for insurance policies, it is imperative that you be truthful with all the information you provide. This protects you from trouble and from the rejection of claims in the future.
The false claim is another common type of insurance scam. This can be claimed for an accident that never happened, a staged accident, and other dishonest claims. Slips and falls are the most common staged accidents, they have a high payout, and proving that it was faked can be difficult.
Protect yourself from fraud
One of the effective methods to protect yourself from fraud is by using technology. The advancement of analytical technologies has improved fraud detection and has helped protect people. Suspicious claims have been reviewed further using programs and related software.
Licensed agents only
As an individual looking for policies, you can protect yourself from fraud by getting your coverages from licensed insurers and intermediaries. Insurance policies are easy to purchase, you can just use online or offline channels. Regardless of the medium you use, you need to ensure that you are getting your policy from a licensed agent.
Premium payment receipt
If you are paying online or via a cheque, always use the name of the company. It is also important to have proof of purchase – a receipt to keep for future references. You can also check out the company’s website to examine the validity of your policies and payments.
Are you looking for an agent for your insurance needs? Do you have any questions about your policies? Here at London Insurance Agency, we have professional and licensed agents always ready for you.
London Insurance Agency
Our service center has independent and licensed agents who represent more than one insurance company. They are well-versed in the law, insurance policies and coverages, making them very qualified to answer any of your questions. Working with our agents lets you get the best coverage option that’s available.
Don’t hesitate, call us now at +606-864-5152.