The National Association of Insurance Commissioners (NAIC) has some tips to help consumers avoid becoming victims of fraud when they shop for car insurance. Current economy encourages fraud According to recent information from the NAIC, the current soft economy is leading consumers to try and cut down on expenses wherever they can. And with most drivers wishing for a way to cut back on the cost of autoinsurance and insurance fraud on the rise, “taking a shortcut when it comes to your insurance could prove catastrophic and costly.” Too good to be true It turns out that there have been a number of recent scams in states ranging from New Jersey to California and also in between (Florida). But according to NAIC, doing your research, along with a little common sense, goes a long way in avoiding being taken for a ride (if you’ll excuse the pun). “What seems too good to be true often is,” said NAIC CEO Dr. Therese (Terri) Vaughan. “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.” Double trouble Unfortunately, being taken in by a fraudulent insurance agent or company is doubly bad – not only are you out the money you paid for the policy, the same transaction could unknowingly leave you without lawful insurance coverage on your vehicle. There are ways that you can protect yourself. The first step is to rely on your state insurance commissioner. “State insurance regulators are always on the lookout for these individuals and companies,” continued Vaughan. “Consumers can always protect themselves through proper research and vigilance.” Steps to take According to the NAIC, you should take the following steps before purchasing a new policy: •    Stop before signing any paperwork or writing a check. Fraud by unscrupulous agents •    Call your state insurance department, which is easily reached by phone. •    Confirm that the company or agent offering insurance is legitimate and licensed in the state. Even when you’ve verified that the company is legitimate, the agent working for that company can collect your money without delivering a policy to you. You will know if this happens if you haven’t received an identification card or a copy of your policy in a timely fashion. According to the NAIC, if this happens, here is what you should do: •    Contact your state insurance department to file a complaint against the insurance company. The Bottom Line ... •    Visit www.naic.org and completing the form provided by the Online Fraud Reporting System (OFRS). Through the OFRS, consumers can take a proactive role in identifying and reporting insurance fraud.

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Tags: Auto Insurance News

This entry was posted on Tuesday, June 9th, 2009 at 11:41 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed.