How to Detect Insurance Scams

Insurance fraud is something you should worry about if you are in the process of switching insurance providers or have been approached by an insurance agent promising plans that sound too good to be true. When detecting insurance scams, keep your eyes and ears open and ask a lot of questions about the plan. If you suspect an insurance company of fraud, report the company immediately.

Instructions

• 1

  Compare coverage costs to the number of plan benefits and network size. An insurance provider with costs 25 percent or more below the average price might not be legitimate, especially if that provider promises a higher number of plan benefits and a larger provider network than competitors.

• 2

  Ask to receive a copy of the insurance provider's state-issued license. Steer clear of insurance plans and insurance agents who are not licensed to operate in your state. Equally, steer clear of insurance agents who fail to use the term "insurance" when selling a plan.

• 3

  Listen for fact-based responses to your questions and request written confirmation of any promises or quoted plan prices. Also, avoid insurance companies that are unwilling to provide concrete information about its background.

• 4

  Obtain a consumer rating from the Better Business Bureau and contact the state insurance department for background information about the insurance provider. Avoid any insurance company that is not recognized by the BBB or the state insurance office.

• 5

  Inquire about enrollment requirements. If you are required to join an "association" to qualify for coverage, but are not given traditional member rights and responsibilities, avoid the company.