Auto Insurance Fraud
The article refers to Texas but the lesson can be applied
in most places.
Most Texas agents licensed to sell car
insurance are honest and law-abiding. Each year, however, TDI
revokes some agents´ licenses for stealing customers´
premiums or committing other fraudulent acts.
a scenario from TDI case files: A woman and her son paid a Houston
agent $7,800 for full coverage of their new car and pickup truck.
The woman received a temporary "binder" but received inadequate
or no responses when she called the agent´s office to ask
about her policy. TDI investigators found that the agent had stolen
the woman´s premiums. The Commissioner of Insurance revoked
the agent´s license, and a grand jury indicted him for stealing
premiums paid by at least 30 customers.
deceptive agents have provided their clients with fake proof-of-insurance
cards naming non-existent insurance companies or showing false effective
dates. Selling or using a fake proof-of-insurance card is a crime
scam, called "sliding," unscrupulous agents load unwanted
and undisclosed coverages onto their customers´ auto policies.
People pay $100 to $200 extra for motor club memberships, accidental
death and dismemberment insurance and other coverages they didn´t
want and didn´t know they were buying.
Against Auto Insurance Fraud
only with reputable agents. Ask your friends to recommend agents
they found helpful and reliable. Don´t let yourself be rushed.
Give yourself time to shop.
Know what you´re buying. When you get a price quote, make
sure the agent itemizes each coverage and its price. Look elsewhere
if an agent claims to add "free" coverages to your policy.
Get a receipt for your premium and make a copy of the check or money
order for your records. If you agree to an installment plan, get
the paperwork to show how much you´re paying and for what.
Be suspicious if an agent bills you for future premium installments.
Normally, an insurance company or premium finance will do this,
not the agent.
Get and keep proof of insurance. In nearly every case, the agent
should give you a binder, issued in the name of the insurance company,
to show you are covered. Only a binder is evidence of immediate
coverage. The company should send your policy and proof-of-insurance
card within 30 days. The card must list the company´s name
and toll-free number, your policy number, the make and model of
your car and the dates of your coverage. A proof-of-insurance card
listing only the agent´s name is not valid.
Don´t assume your policy is effective the same day you meet
with and pay the agent. Check the binder to make sure