Scams, by their own nature, are bad – but insurance scams go beyond the pale. They prey on people’s trust and their sense of right and wrong, coming up with the most insidious ways to make the innocent look guilty and sign their savings away. Lives have been ruined – and ended – as a result of these crimes, but as with most crimes, there are telltale signs that something isn’t right before you sign on the dotted line. Here are three ways to spot an insurance scam.
1. Staged Accidents
Every driver knows that as good as he or she may be behind the wheel, there’s always someone out there who isn’t, and that someone is the reason we all get auto insurance. But what if that someone isn’t really a bad driver, but an insurance scammer? They stage accidents to make you look like the guilty party and have to fork over thousands of dollars in reparation and fines.
How can you identify these scammers? A scammer who stages an accident will usually do so with a team of colleagues, ‘witnesses’ who show up on the scene of an accident immediately after it happens. These ‘witnesses’ may recommend (or even urge you to consult) certain lawyers or doctors (usually more fraudsters also in on the scheme). If a tow truck arrives on the scene suspiciously quickly, it may be a prop in the ruse, designed to throw you off your game while you’re still disoriented from the accident. If, following an accident, everything happens very quickly, there is the possibility that you are being manipulated into a corner. Use a trusted insurance provider, for example, those found on quote engines like US Insurance Net before listening to anyone else.
2. Fraudulent Discount Healthcare Plans
Medical and health insurance is a complicated jungle, and unfortunately, there are predators who use the lush red tape to trap innocent people who have to navigate the world of claims and payments. Insurance scam artists call up people who need expensive surgery and offer a “discount healthcare plan”. They use similar terms and words in the health insurance world, such as “pre-existing conditions” and “affordable healthcare”, and might assure their victim that the plan is supported by the relevant doctor and/or hospital.
The truth is much less comforting. While there are legitimate discount healthcare plans, fraudsters deliberately blur the lines between discount plans and health insurance, preying on the inability of most people to easily pay off surgeries that cost thousands of dollars. They promise to pay off a significant portion of the bill if a client enrolls and pays a monthly sum – but do no such thing (other than take your money).
If a salesperson or telemarketer is pushy for a quick signup, promises wildly optimistic discounts that seem too good to be true, if their program has a steep enrollment & monthly fee, or if they encourage you to drop your current program, beware. Get everything in writing, and if the person on the other end of the phone is reluctant to provide any proof or written commitment, you’ve probably headed off a health insurance scam.
3. Personal Injury Insurance Mills
We trust that if someone accidentally (or otherwise) hurts us, there are systems in place that ensure we don’t go bankrupt in paying for hospital and attorney bills. Naturally, these systems are prime targets for insurance scammers, who set up ‘insurance mills‘ that promise unnecessary and expensive medical and legal assistance. They sucker us in with promises of specialists, righting grievous wrongs, and complex legalese and terrifying (and drastically exaggerated) medical jargon. All they really want is for us to sign the checks they put in our hands.
Fortunately, despite how insidious they are, you can see them coming a mile away: they will insist that your injury, no matter how small it is, requires medical attention – and of course, they know a physician. If someone else caused your injury, they might tell you they know of a great lawyer who handles cases like these; they may even say you can get rich from the settlement. If they try to rush you to make a decision, tell you what you want to hear, or scare you with worst case scenarios of how bad your injury is, you’re likely looking at an insurance scammer out to get you.