Friday, Febraury 20, 2004

Questions and answers from Oxendine

Q: I have been offered insurance, but I am suspicious of the policy because it sounds too good to be true. How can I verify that the agent and his offer are legitimate?

A: Insurance fraud is one of the most costly white-collar crimes in the nation, so it’s a good idea to educate yourself to keep from becoming another victim.

Insurance fraud is deliberate deception, whether of a consumer or an insurance company, with the intent of illegally collecting money. Various forms include filing an inaccurate auto or health claim, or the illegal sale of bogus “policies.” Here are some suggestions to protect yourself from this criminal activity:

• Verify the legitimacy of the company and agent. Companies and agents must be licensed in Georgia to sell insurance in the state. To confirm the credibility of a company or agent, contact my office at 404-656-2070, or 1-800-656-2298, Monday through Friday from 8 a.m. to 7 p.m. You can get answers to the following questions regarding any potential purchase of insurance: Is the company licensed in Georgia? Is the company licensed to sell the line of insurance you are interested in buying? Is the agent properly licensed, and a legitimate representative of the company? Does the company have a good record of handling complaints?

• Check their credit rating. Legitimate insurers have their “creditworthiness” rated by agencies such as Standard & Poor’s, A.M. Best Co. or Moody’s Investor Services. You can check a company’s rating online at Web sites including www.standardandpoors.com and www.ambest.com.

• Keep detailed records. Get all rate quotes, correspondence, payment receipts and key information in writing for your files. You should receive a copy of your new policy within 30 to 60 days of purchase. If you don’t, contact the insurance company.

• Is there a high-pressure sales pitch? If a particular group or agent has contacted you repeatedly with a “limited-time” offer that makes you uncomfortable, trust your instincts and steer clear.

• A sales pitch similar to the one above may be urging you to change your current policy to one of theirs. They may try to convince you to change coverage quickly without giving you the opportunity to do adequate research.

• Unwilling or unable to prove credibility. A licensed agent will be more than willing to show adequate credentials.

• If it seems to good to be true, it probably is.

If you suspect fraud, report it to my office immediately at the above numbers. In Georgia, insurance fraud is a felony, punishable with a sentence of two to 10 years in prison and/or a fine of up to $10,000.

Please send your insurance questions to Insurance Commissioner John Oxendine, 716 West Tower, 2 Martin Luther King Jr. Drive, Atlanta, GA 30334. Or call 404-656-2070 (toll free at 1-800-656-2298), from 8 a.m. to 7 p.m. weekdays, for assistance with an insurance question. TDD services available at 404-656-4031. Web site www.gainsurance.org.