How to Avoid Becoming a Victim of Insurance
Insurance fraud is not typically a violent crime, but it is a lucrative one. As consumers, there are several common-sense steps you can take to help reduce your risk of becoming a victim of fraud and minimize its impact.
Be an Informed Consumer. Insurance premiums are a significant expense for most of us. The premiums you pay are based on your individual claims history and the degree of risk involved. Generally, the greater the risk, the higher the premium. For example, the theft premium for a Cadillac will be far higher than that of a Toyota because more Cadillacs are stolen each year. Similarly, a stock car racer will pay more for life insurance than a librarian, all else being equal.
Comparison Shop. Premiums can vary significantly from insurer to insurer so it pays to shop around. To make comparison shopping a little easier, the Department of Financial Services publishes consumer guides for auto, homeowners, long-term care and HMO/health insurance. These guides can be accessed on the Department's Web site at www.dfs.ny.gov. Moreover, the Department's Web site also contains a newly published "Consumer Guide for Annuity Products in New York" that provides information designed to help consumers understand annuity products and some of the factors to consider when purchasing an annuity. To access these publications, select this link.
Know Your Agent or Broker. Consumers can sometimes be victimized by unscrupulous agents or brokers and discover only after they file a claim that they are without coverage. If an uninsured home is damaged by fire, the owner is solely responsible for restoring it and paying back any mortgage holders. If a driver is involved in an accident while driving an uninsured vehicle, any personal assets are subject to forfeiture if that driver is sued for damages. Deal only with licensed agents and brokers. They must maintain proof of licensure. Ask to see it. Or call the Departments Licensing Services Bureau at 1-518-474-6630 for licensing information.
Where's the Proof? Never make a premium payment in cash. Pay by check or money order made out to the insurance company directly or to the agencynot to the individual agent or broker. And always request a receipt.
Where's the Policy? You should receive a copy of any type of insurance policy complete with endorsements and declarations specifically outlining your coverage and its limitations within a reasonable period after your purchase. If you do not receive it, question your insurer, agent or broker. If there is no satisfactory explanation for the delay, contact the Department of Financial Services' Financial Fraud & Consumer Protection Division immediately at 1-800-342-3736. You may not have the insurance coverage you paid for.
Are You Being Billed for Services You Have Not Received? If you have received medical or dental treatment that is covered by a health care provider, you will receive an "Explanation of Benefits" statement listing the services for which benefits have been paid. Review it thorougly to ensure that you have not been billed for services that were not rendered or for dates on which you were not treated. Check carefully to confirm that you were not billed for more expensive procedures than were actually provided, a practice known as upcoding. Contact your insurer immediately if you feel there are discrepancies. Health care fraud translates into billions of dollars a year, resulting in higher premiums and increased costs for goods and services for all consumers. If you suspect fraud, you can contact the Department of Financial Services' Financial Fraud & Consumer Protection Division toll free Hotline 1-888-372-8369. An investigator will contact you for details and the matter will be kept confidential.
What If Youre Involved in an Automobile Accident? Report the incident to the police and obtain a copy of the Police Accident Report. Be suspicious if the driver of the other vehicle insists it is not necessary to contact the police. That driver’s car may be uninsured or his/her insurance identification card may be fraudulent. Be sure to make note of the other vehicle’s license plate number and obtain important insurance information. If possible, take a photo of the damages.
Auto Insurance Fraud is a multi-billion-dollar problem nationwide. Watch out for these common scams:
- The staged accident A vehicle filled with people will stop suddenly in front of you, setting you up as the cause of a rear-end collision, while doctors and lawyers who are participants in the scheme “handle” the subsequent medical claims and lawsuits.
- Runners These individuals will solicit the injured or allegedly injured parties at the accident scene or shortly thereafter and direct them to medical facilities that are involved in the scam. If you are involved in an accident, be on the lookout for “runners” and don’t become a victim. In addition, be suspicious if, following an emergency room visit, you are contacted by someone claiming to be employed at the hospital who recommends a particular medical facility for follow-up treatment. Also be wary if a lawyer who is unknown to you recommends a specific law firm to discuss a possible lawsuit.
- Inflated claims At the accident scene, be sure you know the extent of the damages to your car and the other vehicle. Carefully review subsequent repair estimates and claims. Body shops may enhance existing damages or conspire with adjusters to inflate the repair estimate.
Dont allow high-pressure salesmanship to persuade you to sign up for a type of policy or certain coverages that you are not sure you need. Take time to decide whats right for you.
your policy carefully before you sign. If you have questions, ask your agent or
broker, or your insurer. An additional source of information and help is the Department's
Financial Fraud & Consumer Protection Division. For additional consumer information,
select this link.