7 Types of Insurance Scams To Avoid Falling Victim To

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By: Aquib Nawab


Fraudsters intentionally cause car crashes with innocent drivers to file injury claims and collect insurance money. The collisions may seem minor or not make sense. Install a dash cam in your vehicle to help prove fault if this happens. Get contact and insurance information from all parties involved after any collision. File a police report if the accident seems staged.

1 - Staged Accidents

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Dishonest insurance agents will pocket customers' premium payments instead of forwarding them to the insurance company. This leaves the policyholder uninsured and unaware of non-payment. Carefully review bank and credit card statements to verify premiums are being properly paid. Follow up directly with the insurer if you notice missed payments on your statements. Consider paying insurance companies directly, rather than going through an agent.

2 - Premium Heist

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3 - Bogus or Exaggerated Claims

Scammers file fraudulent claims for injuries, damages or losses that never actually occurred, or they inflate the costs of real damages. Be sure to provide complete and accurate information when filing legitimate claims. Get multiple repair estimates and carefully review any claim payouts before approving.

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Unethical insurance agents try to continually switch customers into new policies in order to generate new sales commissions, costing clients more in fees. Avoid frequently changing policies unless truly needed. Carefully review all details of any proposed policy changes to understand the impacts. Be aware of any cancellation fees in your existing policy as well.

4 - Fee Churning

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A person falsely claims a family member or spouse has died in order to collect large life insurance policy payouts. Inform your insurer of any major health issues upfront and regularly review your policy beneficiaries to prevent payouts to the wrong person.

5 - Fake Death

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6 - Ghost Billing

Shady medical clinics and healthcare providers bill insurance companies for medical services, tests and procedures that were never actually performed. Carefully check all medical bills and statements to ensure you received all charged services. Ask providers to clarify any dubious charges.

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Criminals steal personal information to obtain medical services or file fake claims under the victim's name. Routinely check credit reports and statements for unknown accounts or charges indicating potential identity theft. Immediately report any suspected fraud and freeze affected accounts.

7 - Identity Impersonation

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