In weak economic times, consumers can avoid becoming victims by staying vigilant
and knowing their options
Released: June 10, 2009
fraud has become a nationwide problem, highlighted by recent scams in such
states as California,
Jersey and Florida. In today’s unstable
economy, insurance fraud has the potential to get even worse as consumers
may be looking for ways to cut down on their insurance costs. However,
taking a shortcut when it comes to your insurance could prove catastrophic
Purchasing a policy without thoroughly researching it could leave consumers
susceptible to insurance fraud, according to Commissioner of Insurance Jim
Donelon. Selecting the cheapest policy available without first checking into
who is selling it could potentially leave consumers without any legitimate
“What seems too good to be true often is,” said Commissioner
Donelon. “Consumers need to be extremely careful not to take a shortcut
with their insurance, which, in the long-term, can affect the safety and
security of themselves and their loved ones.”
Unscrupulous people can defraud consumers by collecting premiums for bogus
policies with no intention or ability to pay claims. Phony home, health, life and auto policies typically are offered at rates that are significantly
lower than the traditional market price in order to woo consumers who are trying to save money.
But consumers can rely
on their state insurance commissioners to actively protect them against
Louisiana Department of Insurance is always
on the lookout for these individuals and companies,” continued Commissioner
Donelon. “Consumers can always protect themselves through proper research
Verify the Provider
Before purchasing a new
policy, the best way consumers can protect themselves is to research the
insurance company and to read the Explanation of Benefits
(EOB) to familiarize themselves with their coverage and confirm that their
policies provide the coverage they need. For help with your research, consult
the National Association of Insurance Commissioners’ (NAIC) Consumer
Information Source to review the company’s financial and claims history.
To use this free resource, go to https://eapps.naic.org/cis/. If you are
unsure about the insurance company or agent you are dealing with:
•STOP before signing any paperwork or writing a check.
•CALL the Department of Insurance at 1-800-259-5300.
•CONFIRM that the company or agent offering insurance is legitimate and licensed
You can also visit our Web site for more information at www.ldi.state.la.us.
Watch for Hidden Fraud
Employees of legitimate insurance companies can also deceive consumers for
personal gain. Signs of fraud include the failure to receive an insurance
identification card or a copy of your policy in a timely manner. If you have
questions or concerns, contact your insurance company directly or call the
Department of Insurance for assistance at 1-800-259-5300.
Report Suspected Insurance Fraud
If you believe you have been a victim of insurance fraud, or if you are
aware of an instance of insurance fraud, it is important to report it by:
the Department of Insurance to file a complaint
www.naic.org and completing the form provided by the Online Fraud Reporting
Through the OFRS, consumers can take a proactive
role in identifying and reporting insurance fraud.
Get More Information
Consumers can always get more information or explanation about their insurance
policies from the Department of Insurance. Visit our Web site at www.ldi.state.la.us
or go to www.naic.org to find answers to your questions.
Get smart about your
insurance needs. For more information about auto, home, life and health
options — as well as tips for choosing the
coverage that is right for you and your family — visit www.InsureUonline.org.
About the NAIC
Formed in 1871, the National Association of Insurance Commissioners (NAIC)
is a voluntary organization of the chief insurance regulatory officials of
the 50 states, the District of Columbia and five U.S. territories. The NAIC
has three offices: Executive Office, Washington, D.C.; Central Office, Kansas
City, Mo.; and Securities Valuation Office, New York City. The NAIC serves
the needs of consumers and the industry, with an overriding objective of
supporting state insurance regulators as they protect consumers and maintain
the financial stability of the insurance marketplace. For more information,