Insurance Fraud Prevention

Contrary to popular belief, insurance fraud is not a victimless crime. Behind tax evasion it is the most costly white-collar crime in country and costs Americans billions of dollars each year. Below are some tips to help consumers avoid becoming a victim of insurance fraud.

 Tips to Prevent Insurance Fraud:

• Do not buy the first policy you find. With most things you buy, you shop around and compare prices and features. Do the same with insurance. Always obtain quotes from several companies and compare benefits and rates before you pay your first premium.
• Be careful to only buy from authorized companies and agents. Unauthorized insurance operations are illegal, and their policyholders are unprotected if they go broke. You can verify this information by searching for the company or agent on the LDI's database.
• Be sure to look into the credibility of the agent as well as the company. If the price quoted sounds too good to be true, it probably is. Low premiums do you no good if you receive bad service or the company is unable to cover your claim.
• Fill out your application carefully. Never sign blank forms or blank applications. Incorrect, incomplete or false information on your application can jeopardize your insurance coverage. It is a crime to supply false information on an insurance application or claim. Don't let an agent convince you to say anything or file information that is not true.
• Never pay for your premium in cash. Always pay insurance premiums by check or money order. Make sure that you have a receipt that shows that you actually paid the premium. Whenever possible, make your payment to the insurance company, instead of the agent.
• Expect a copy of your policy from your producer in a reasonable amount of time. (Note: For auto insurance, an ID card is NOT considered a copy of policy.) If you do not receive your policy, contact your agent, and then contact the Louisiana Department of Insurance.
• Read your policy immediately to verify that it contains the coverage you discussed with your producer. If not, contact your agent immediately or return your policy.
• Remember there is a free-look period in which you have time to review a policy once you have received it. All life and health policies must have a free-look period of at least 10 days.
• Keep copies of all insurance records, including copies of all premium payments. Store extra copies in a safe-deposit box, in a waterproof and fireproof container, or with a friend or attorney.