Insurance World

Insurance is meant to protect you. But scams out there can make buying insurance dangerous. These schemes can cost you hundreds or even thousands of dollars, and leave you and your family without vital insurance protection. Here’s what to watch out for:

Scams

• Steal your premiums-An agent takes your premium check but doesn’t buy you the promised insurance. Instead, the agent steals your money. You aren’t protected, and may not know this until you make a claim.

• Sliding-An agent secretly slips extra features into your policy (such as motor club membership, legal defense coverage, accidental death coverage, guaranteed renewable life, towing coverage). Hidden “extras” that may be worthless can add up to $200 or more to your premium.

• Churning-You’re conned into dropping a perfectly good life insurance policy and buying an expensive one you don’t need. Example: Cashing out your valuable whole life policy to buy a “better” one. You lose years of built-up cash value and have to start all over again. Seniors, especially, should watch out.

• Fake insurance-You’re sold fake insurance (often from a company that isn’t licensed or doesn’t even exist) such as auto coverage, or health insurance for your business.

Fortunately, you can protect yourself. The Coalition Against Insurance Fraud offers these money-saving tips:

• Call your state insurance department and make sure both agent and insurer are licensed.

• Normally, you should make your premium check out to the insurance company, instead of the agent. Call the insurance company within 60 days to confirm you’re covered.

• Read all insurance documents thoroughly before you buy. Insist that the policy is clearly explained point by point, in plain English. Also have a trusted relative or financial expert review. Demand a point-by-point comparison with your current policy. Do you need this new policy? Is it better than your current one?

• Go slow if the price of coverage seems too low to be true.

• Back off if you get vague answers to your questions, or you’re pressured to “sign up now because this special deal expires today.”

• Never sign a blank insurance form, and get copies of all forms.

• Be wary of door-to-door salespeople or e-mail pitches.

Insurers have added coverage for identity theft to their offerings in addition to the traditional life, health, pet, travel, and automobile coverage. The yearly costs attributed to crimes involving identity theft are staggering. While services are available to help you keep track of your personal information, they come at a price and may not be worthwhile.

Citi Credit Monitoring Service may be of value, since it is available online, its web site is secure, and the firm guarantees your privacy will be protected. This site lets you review your credit accounts and files on a regular basis in a relatively inexpensive manner. Other companies offer coverage for identity theft and include software that helps to track identity theft activities and offers help if you become a victim of this crime. The software also provides your FICO and additional monitoring options.

If you become a victim of identity theft, you may also become a victim of the court system. While millions of people suffer from identity theft, few go to court to fight for the restoration of their identity. The court process can take a very long time, and since identity thieves generally establish credit and bank accounts in your name, you may be the one on the hook for prosecution from creditors and the courts.

Many people believe that victims of identity theft have done something to expose themselves to this crime and that, therefore, it is their own fault. This is not the case. Cases of identity theft increase every year, and millions of people are affected. Doctors, lawyers, politicians, judges, and other educated people often become the victims of identity theft. The criminals themselves are often highly educated, working in respected careers in order to gain access to information they can steal. The poor are often made scapegoats for the crime, while the real criminals go unpunished.

It can be to your advantage to obtain identity theft insurance. You never know who the thief might be or when a theft may arise. The insurance coverage usually costs just a few dollars per month. You may also purchase the identity-theft software for a one-time fee. IN some states, laws have been enacted to prohibit the publication of personal identifying information. However, with so much information online, the Internet is fertile ground for ‘hackers’ who gain access to databases containing personal data on millions of people. Therefore, you should take any and all precautions you can to protect yourself from identity theft.