Getting scammed out of your hard-earned cash is very disheartening, and the chances of that happening are higher than you might think. According to the Insurance Bureau of Canada, history has shown that frauds become more prevalent “in times of widespread economic hardship and natural disaster”. The COVID-19 pandemic has proven to be no different, as the statistics show an increase in cons. While many of these happen online nowadays, you should beware of insurance fraud both offline and online. Here are some guidelines to help you avoid losing large sums of money on fraudulent insurance.
Familiarize yourself with common insurance scams
Sneaky tricksters always find creative ways to get their hands on people’s money. Therefore, in order to know how to avoid insurance fraud, first, you need to be familiar with the basics of popular insurance scams. Although not a foolproof method, being knowledgeable on this topic can protect you from easily falling victim to some of these common grifts. One example would be staged collisions and there are multiple variations of this scheme. Essentially, the criminal would claim that you are to blame for a traffic accident that didn’t actually happen, for the sake of receiving insurance payout for supposed injuries and/or damages to their vehicle.
Be wary of contractors who approach you first
In any case, whenever you’re approached by a contractor, it’s highly advisable not to sign anything before doing a background check. Even when a contractor appears like a knight in shining armor at a moment of crisis, such as after a heavy storm damaging your roof, you ought to be careful. Some grifters will impersonate real contractors and offer to repair your roof. They usually ask for cash in advance and either don’t repair the roof at all or do more damage to it so they can claim your Homeowner’s Insurance. Therefore, your best bet is not to give money to anyone who offers unsolicited services and tries to rush you into paying.
Conduct thorough research on the chosen insurance company
Not all insurance schemes happen by you specifically being the target, as is the case in the above-mentioned examples. You can also be hustled when looking for insurance. Selecting an insurance company always takes a bit of research, in order to make sure that their offer matches your needs and preferences. However, it’s wise to do a little bit more digging once you’ve decided on a particular insurance company to make sure that the said company is legit. Fraudulent insurance companies aren’t the only problem, though.
Legit insurance companies and banks may sell you something which is colloquially referred to as “junk insurance”. These policies cover more than you asked for and were aware of at the time of purchase. Basically, you end up paying for additional services that are useless to you. Luckily, companies like Claimo offer a guaranteed junk insurance refund for those who have been sold add-on insurance. You can start your claim immediately by filling out the form, and Claimo will contact you upon reviewing your application.
Carefully read the policy before signing
Just like signing any kind of document, it’s crucial that you read it thoroughly, including the fine print. Pay attention to whether what is written in the policy document matches what you agreed on with the insurance company. Furthermore, you need to scrutinize it for any misleading information and loopholes. This will help you avoid any inconveniences in the future. Also, sometimes you may be asked to sign a blank policy. Although a blank policy isn’t always a sure tell-tale sign that there is going to be insurance fraud at play, it’s best to avoid these whenever you can. Any blank document gives the person withholding it the power to write anything that suits them, making it easy for them to charge you with anything they set their mind to.
Pay with your bank account
As mentioned before, some insurance cons involve the trickster asking for cash upfront. That way, there is no trial that you’ve ever given them any money, and they can easily disappear. Writing a cheque is a more secure option and you should get in touch with the insurance company to check the details, so as to avoid being tricked by the insurance agent. Thus, the simplest way would be to avoid cash payments and cheques altogether and pay with your bank account instead. Then, you’ll have the evidence of how much you’ve paid and to whom.
Having learned how different cons work, you’ll be able to spot con artists more easily. However, that doesn’t mean that you won’t be susceptible to scams anymore, as anybody can be tricked. That’s why you always need to take extra steps to ensure that the deal you’re signing is legit and suits your needs.
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