Insurance Scams – Premium Stealing
Insurance companies now are massive, global businesses. They’re household names and widely respected and trusted. With such a cluttered field, however, there are always going to be new names popping up and seemingly good deals offered by people of whom you have never heard. It’s important to make sure that you can trust the person that you’re dealing with because insurance is one of the most important things you can purchase.
In any business where large sums of money are involved, there are people who are looking to prey on people’s trust. You need to make sure that you have the proper coverage for your requirements and that the coverage that you have actually exists.
One obvious method of making money from unsuspecting policyholders is to steal the premiums. In May 2006 a Scottish insurance broker was convicted of fraudulently selling ten million pounds worth of policies. When investigated he was shown to be selling home insurance policies that did not offer proper cover and claimants thus discovered that they were left both out of pocket and literally thousands of policyholders discovered that their documents were not covered by insurers. One man found himself in almost £50,000 worth of debt to builders are he suffered a house fire.
The broker was essentially stealing the premiums in order to line his own bank account. If you trust the broker completely there’s no way of telling whether he’s legitimate or not until you need to claim and then it may be too late. The problem with insurance is that you don’t really notice its presence until you need it, and then it may be too late if there is something wrong with the policy.
The simple and straightforward way of getting round this is to make sure that you call the insurance company and check that you do actually have a policy. If you use well known, respected names, and talk to the company directly rather than operating through a broker you may find that you get a better deal and there is also less chance of finding that you have been the victim of a scam.
Insurance fraud is a serious issue, and it’s one that costs people large sums of money often without being aware of it. Fraudulent claims cost policyholders in the region of £40 per year, and that’s just in regards to vehicle insurance. Fraudulent brokers on the other hand can cost a massive amount more. Whilst it’s impossible to do anything about higher premiums, it is possible to protect yourself from fraud. If you’re going to deal with a broker make sure that they have a good reputation and then check with the company that you are actually covered, take the time to ask them the extent of your policy as you want to make sure that any coverage that you do have covers all eventualities.
For home insurance, try RIAS.
