Fake Insurance Follies

 By Catherine Powell

Image courtesy Pix4free.org

Whenever something sounds too good to be true it usually is.  That little ditty applies doubly when it comes to phony insurance offers.  Advertising being what it is today, you have to be wary of pie-in-the-sky deals that are designed to get you to click or call for more information.  Not only with these too good to be true deals disappear when you respond, if you aren't careful you could wind up divulging personal information to who knows who or you could wind up purchasing a policy that isn't worth the paper it's printed on.  To help you weed out the bogus offers that are all over the TV and Internet, I decided I'd clue you into some of the most flagrant insurance rip offs that are currently being used to dupe the public today.

The $6,400 Question

Perhaps you've seen offers on TV that promise a "$0 cost plan with a $6,400 spending allowance if you sign up for supplemental Medicare insurance."  These ads flooded the airwaves and social sites recently.  Some of these ads boasted $6,400 in premium healthcare credits or a flex card for those who qualify.  They then urged viewers to call the provided toll-free number to apply.  Since the offer of $6,400 seemed an odd amount, several consumer groups looked into it only to find that while there is a subsidy that offers a Medicare tax credit in this amount, no one will ever see a dime in cash from it.  

According to a blog on verify.com, “Some advertisements claim that Medicare is giving out flex cards containing several hundred dollars to apply toward food and other items,” AARP warned in 2022. “This particular scam directs you to a website where you’ll be asked to provide personal information that can be stolen, such as a Social Security number, credit card number or bank account information.”

The blog goes on to warn consumers against providing their Social Security Number, Medicare number, credit card number, or banking information to anyone other than an authorized healthcare insurance agent, broker, or advisor.  Also, be wary of unsolicited calls from would-be Medicare representatives.  These calls are invariably designed to get you to divulge your Medicare and Social Security numbers.  

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Auto, Home & Life Insurance Scams

Everybody wants to save money.  That's a given.  When it comes to insurance of any kind, the best way to shop for any insurance policy is to work with an independent broker or agent who has access to many providers.  Don't fall for any of the following:

1. Clickbait - All too many online ads bait you with pitches such as "Save Hundreds of Dollars on Insurance."  Click on the link and you're taking your financial life in your hands.  Some of the sites are after sensitive information, while others are going to try to sell you phony policies that will leave you turning in the breeze the moment you try to file a claim.  Even worse, by clicking on any links provided, instead of saving money, you could wind up losing your shirt by divulging a credit card number to these snakes.  

2. Phishing & Smishing - Another all too common tactic used to lure unsuspecting victims is via phony email and text messages promising to save you a bundle on your insurance.  Just like clickbait, the whole purpose of getting you to respond is to deliver something other than what was promised in the message.  This could include delivering a payload of malware to your phone, tablet, or laptop computer.  Even if all the message asks is whether you'd be interested in saving money, never respond unless you want to get taken to the cleaners by charlatans masquerading as insurance agents.  The best thing to do is relegate these messages to your spam folder and block the sender from any further access to your device.

3. Phony Phone Calls - Any time you receive an unsolicited phone call about your insurance, you're playing with fire.  Most likely the call originates in a phone room buried in the bowels of a building in a foreign country.  Whether the call is live or a robocall, respond in any way other than hanging up and your world could get turned upside down.  That's because once the slick operators know they have a live one, you're sure to get many more unsolicited calls.  The only safe solution is to hang up immediately and block the phone number.

4. Premium Diversion Scam - Another way you can get scammed by an underhanded insurance agent is to make your payment out to an agent or his/her agency.  If you make this mistake, you give the agent the opportunity to pocket your premium instead of giving it to the insurer.  Called embezzlement by another name, this scam can not only cost you the money you paid to the agent, but it could cost you much more should your home or business be damaged or destroyed since any policy provided to you is null and void.

5. Policy Switching - While the policy in this instance is real, it also provides far less coverage than the one you currently have.  While shopping your policy is not a bad idea, if you run into an agent that is less than scrupulous, they may find you a deal that will later come to harm you financially.  Before you make a deal that you can't live with, make sure you review any policy changes by comparing them to the one that's already in effect.  You may find that the cheaper policy is insufficient to cover your needs.

Image courtesy Pxhere

6. The roof over your head - Be wary of roofers who knock on your door only to claim they can get you a new roof for the cost of your insurance deductible.  It isn't unusual for this to occur after a storm blows through your area.  Since a roof requires an insurance adjuster to conduct an inspection prior to accepting or rejecting such a claim, you may come to find one of three things: Either the claim will be denied and you'll wind up paying the full cost of the roof if you signed a contract with a roofer, the roofer could pocket the insurance check without replacing the roof, or the roofer could later be sued by the insurance company for fraud.  The Insurance Journal recently reported the latter of these on their blog.  In one case, a Florida roofer was sued when it was found the company deliberately damaged roofs to collect on the claims.  In short, your best bet to keeping a roof over your head is to avoid dealing with door-knocking roofers.  Better to let several roofing companies bid for your business rather than trust someone you've only just met.

7. Adding Insult to Injury - It's bad enough to weather the storm only to file a claim to make your home or business whole again.  It's another to have a "restoration expert" rob you blind or cause additional damage to your property.  But that's what can happen if you wind up working with a contractor who is either unqualified or underinsured to do the work.  In some cases, representatives of sham restoration companies have been known to abscond with insurance checks paid to home and business owners without doing any work at all.  After a storm wreaks havoc on an area, expect to be inundated with representatives looking to sign you up for repairs.  Just make sure you check out their credentials and the company's reviews to find out whether you're dealing with a reliable firm or a quick buck artist.

8. Elder Fraud - If your parents are on Social Security, this makes them ripe for a ripoff.  All of the above-mentioned frauds and more are being perpetrated on senior citizens from coast to coast.  Many times the elderly are taken in by a smooth talker on the phone or a smiling face at their front door.  This can cause them to divulge sensitive information, sign up for or switch their insurance coverage, or fall for scams that the younger generation would be onto in an instant.  If your parents are retired, you need to help them understand that there are con men and women out there who are out to rip them off and empty their bank accounts.  Better yet, tell them not to deal with any purported insurance agents or sales reps unless they check with you first.  This will save them and you a lot of grief down the road.

Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida.  To find out more ways to save on flood insurance, check out her website at http://aplusallfloridainsuranceinc.com/