January 06, 2005
Alert: Insurance Scams Consumers
Should Watch for in 2005
Distribution Source : PRNewswire
WASHINGTON, Jan. 6 /PRNewswire/ -- Fake health insurance,
insurance-agent scams and stolen airbags are among the
eight insurance swindles consumers must watch for in
2005, the Coalition Against Insurance Fraud forecasts.
Insurance cons will remain widespread around the U.S.
despite progress in cracking down on the crimes. Many
scams persist year after year. They can steal from a
few dollars to life savings. They also can threaten
your health and even life.
Contact your state insurance department with questions.
Many warning signals also are posted at http://www.insurancefraud.org/.
Fake health insurance -- Swindlers sell bogus health
coverage to small business owners and consumers. They
promise discount prices and generous benefits -- but
later refuse to pay claims. Your premiums are stolen,
and you're forced to pay medical bills yourself. Your
health also can be jeopardized by delays in treatment.
Action: Contact insurance department to ensure plan
is licensed.
Airbag fraud -- Crooked body shops remove deployed airbags
from cars and fill the cavity with old rags or beer
cans. Then they falsely bill your auto policy for a
new airbag. Your life is at risk without airbags, and
your insurance is charged for expensive items you didn't
pay for. Action: Have outside mechanic inspect after
repairs, or before you buy used car.
Stolen premiums -- Most insurance agents are honest,
but some take your premiums without buying coverage.
You have no insurance when making a claim for damage
to your car, home or business. Action: Avoid writing
premium check to agent. Call insurer to confirm you're
covered.
Churning -- Agent convinces you to use the built-up
value of your whole life policy to buy a "better"
policy you don't need. You must start building up your
policy's cash value again. Seniors are especially at
risk. Action: Get second opinion from financial advisor
before buying.
Sliding -- Agent secretly "slides" unwanted
expenses into your policy, especially auto coverage.
Your premiums can increase $100-$200. Motor club memberships
and accidental-death coverage often are added. Action:
Read policy and prices closely before signing. Never
sign blank insurance form.
Staged accidents -- Innocent drivers are maneuvered
into car crashes, sometimes at dangerous speeds. Crooks
then make fake injury claims against your auto policy.
Sometimes they suddenly brake so you rear-end their
car. Or they speed into your path when you pull out
of a parking space. Action: Never tailgate. Be wary
of driver waving you out of parking space.
Windshield fraud -- Cons offer to replace your windshield
for free, even when undamaged. You have a needless claim
against your auto policy, and may have shoddy glass
and poor installation that endanger your life. Crooks
may also secretly make more claims against your policy.
The cons approach people at car washes, gas stations
and county fairs. Action: Just say no.
Viaticals -- Consumers buy fake investments in life
policies of people who are sick or dying. A crooked
viatical firm promises you a payout when the policyholder
dies. But the policies were obtained fraudulently, or
never existed. Your investment is void and your money
is gone. Action: Avoid anyone promising guaranteed returns.
Have financial adviser confirm plan is legal, and right
for you.
Coalition Against Insurance Fraud
CONTACT: James Quiggle of Coalition Against Insurance
Fraud,
1-202-393-7331, or jamesq@InsuranceFraud.org
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