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You buy insurance to protect yourself financially from illnesses, automobile accidents, house fires or death. If the insurance you buy isn’t legitimate, you have wasted the money you paid for premiums and could face thousands of dollars in unpaid claims.
Insurance fraud can happen in any line of insurance including auto, homeowners, health, life, worker’s compensation and medical malpractice. Fraudulent companies or agencies may operate through direct mail solicitations, newspaper, newspaper or magazine advertisements or over the Internet.
This fact sheet gives you some tips to help you avoid buying fraudulent insurance.
Make sure the agent and company are properly licensed…
The best way to protect yourself from insurance fraud is to make sure the insurance agent and company you are dealing with are licensed to do business in Indiana. To sell insurance or provide coverage in Indiana, insurance agents and companies must be licensed by the Department of Insurance and obey our laws and regulations. Licensed companies must also pay into an insurance guaranty fund or association that protects consumers if a licensed company becomes insolvent and is placed in liquidation.
If you buy insurance from an unlicensed entity, you have no guarantee that the policy complies with Indiana laws or that the coverage you pay for will be honored.
It is not always clear whether you are dealing with a licensed insurance agent or company. Official-looking business cards, forms, envelopes or Internet web sites are not proof that the entity is properly licensed. Many fraudulent insurance companies are located outside of the United States but use a local address or post office box.
Before you commit to any purchase make sure the agent and company are licensed in Indiana by: