How to tell if your insurance company is reputable or not
We all know what it feels like to be promised something that wasn’t delivered in the end, like a bad dinner at an expensive restaurant, a bad ending to what you thought was going to be a great relationship, even a co-worker who promises to help with a project and then falls through. It’s not a fun feeling and it’s especially unnerving when it’s something you pay for, turns out to be a scam.
This seems to happen all to often in the world of finance and insurance, which is why we are going to discuss the various ways to ensure you are working with a reputable insurance company or agent. No one wants to realize their insurance company cannot deliver what they promised when it comes time to file a claim. It’s hard to admit, but some bad insurance companies and agents have been known to pocket insurance premiums rather than send them to the insurer, set up fake websites, or post advertisements promising “cheap” insurance policies.
While we aren’t able to completely get rid of all the scammers out there, we can help those shopping for insurance be prepared to recognize possible scam situations and how to avoid them.
What types of scams should I be aware of?
There are three types of scams to be aware of when shopping for insurance: churning, sliding and twisting. While all of these together may sound like a cool dance move, unfortunately, they describe the dishonest moves of insurance agents.
Churning is a dishonest agent who may try to convince you to utilize the value of your current life policy to buy a better policy even if your coverage is perfectly fine. The agent pressures you to do this because they get a hefty commission, but you are left with needing to build up your life insurance cash value all over again.
Sliding is an act from a dishonest agent in which the agent slips extra coverage into your plan that you did not ask for but you will have to pay. The agent may give you the excuse “it’s part of the package” or they may not tell you about the added policy at all.
Twisting is when a dishonest agent urges you to unnecessarily switch your policies by twisting the truth about the downside. The dishonest agent may suggest that the new policy has better coverage when in reality it does not.
Here are some tips to protect yourself from signing a contract with a dishonest agent:
- Check insurance company’s rating on A.M. Best, Moody’s, or Standard & Poor’s.
- Do online research for the agent or insurance company you’re considering and add the words “rip off” or “scam” to see whether any complaints or news articles appear.
- Pick an agent or company that takes the time to answer you questions and doesn’t try to pressure you into signing right away. Price is important, but so is the relationship you have with your insurance agent because they are the folks that take care of you when accidents and emergencies occur.
- Contact your state insurance department to verify that a company or agent is licensed and in good standing.
- Contact the Better Business Bureau to see if there have been any complaints lodged against the agent or insurer.
Talk to people you trust
Always talk to people you trust about their insurance agents and learn why they enjoy working with their agent or company representative. Bring a list of questions to each meeting you have with a potential insurance agent and ask them to go over in detail the policies they are suggesting, what they cover and how it will be handled if you need to submit a claim.
With the right insurance agent, the world of insurance doesn’t need to be confusing or scary.