According to the National Association of Insurance Commissioners (NAIC), health insurance and medical fraud is one of the most common frauds in terms of frequency and average cost. Fake insurance companies can defraud consumers by collecting premiums with no intention or ability to pay claims. These “companies” may offer policies at costs that are significantly lower than the traditional market price in order to woo consumers who are trying to save money.
Consumers should be on the lookout for the following warning signs, as they may indicate that an insurance company is fake:
- If an agent or broker is very aggressive and pressures a consumer by saying they must sign up for a policy right away (sometimes adding…or the premiums will go up).
- The premiums from one company are a lot lower (more than 15-20% less) than other companies’ comparable coverage.
- When a consumer tries to call the insurer to get more details or ask a question, they can’t find a listed phone number, or it is very difficult to get through on the phone.
The NAIC advises consumers to stop and confirm the company they are about to do business with is legitimate before signing an application for an insurance policy or writing a check to an insurance company. The state insurance department can quickly verify whether an insurance company exists and is authorized to sell insurance in their state.
See the attached link for additional information and contact your NEEBCo representative with questions.