Insurance is an important way to safeguard life and property against future uncertainties. However, there are numerous insurance scams, and in this article, we will point out four (4) home and car insurance scams you should be aware of.
Nobody wants to fall for a con. Unfortunately, they happen more frequently than you might imagine, especially in the insurance industry.
The Insurance Information Institute estimates that every year, insurance fraud scams cause losses of around $40 billion, which insurance companies, the government, and the victims of these scams are required to cover (between $400 and $700 per home yearly).
You should be knowledgeable about these scams and how to protect yourself, whether you have or require home insurance or auto insurance. Fortunately, there are a number of indicators that help you spot them.
So, here are 4 home and car insurance scams you should watch out for
Do you want to protect yourself from becoming a victim of one of these scams? What to watch out for is listed below:
- Unsolicited contractor and repair offers.
- Offers for “free” windshield repairs.
- Calls and emails attempting to sell you a new policy (or saying your insurance has expired).
- Overblown damages or injuries.
Lets discuss them one after the other.
1. Unsolicited contractor and repair offers
Paige Schaffer, CEO of Generali Global Assistance’s global identity and cyber protection services, claims that these scams frequently appear in regions affected by severe storms or other natural catastrophes.
According to Schaffer, scammers frequently prey on hurricane or other natural disaster victims. “Untrustworthy homeowners will be persuaded to sign a contract and pay a deposit by unscrupulous contractors who will come knocking on their doors, offering lowball estimates for repairs.”
The contractors may give subpar service or low-quality materials in some cases. In other cases, they may simply disappear with the deposit and never finish the job. They might even overcharge the insurance provider and keep the difference.
It’s crucial to compare prices when getting home repairs done and to thoroughly vet any potential contractors. You may visit a reputable website like Credible to explore what types of homeowners insurance alternatives are available.
When it comes to house repairs, Marissa Sweet, a commercial property and casualty insurance expert at PropertyCashin, advised getting multiple estimates.
“Additionally, during the claims procedure, we strongly advise maintaining regular contact with your insurance provider. You can also dig into the contractor’s licensing background and business history online. Requesting recommendations can be very beneficial.”
You may see how to choose a legit insurance agent here.
2. Offers for “free” windshield repairs
Another example, according to Sweet, is the stops for windshield replacement on the side of the road.
“They frequently claim it will have no impact on the insured . However, it can appear as a claim on the loss reports, and if there are too many of them, they can negatively impact you,” Sweet added.
Everybody’s premiums are frequently raised as a result.
Despite the attractiveness of these offers, Sweet emphasized the importance of speaking with your auto insurance provider directly in order to determine what is and is not covered.
“We would urge you to contact to clarify what the insurance carrier’s stance genuinely is before doing anything,” Sweet said this in case someone says they require your insurance information and will handle filing a claim.
Recommended: Run from any insurance company that does not have these 3 items in their policy
3. Calls and emails attempting to sell you a new policy (or saying your insurance has expired)
Another major cautionary sign is unsolicited phone calls. Sadly, these calls are frequently phishing attempts by callers who want to obtain your financial information and steal your identity.
Attila Tomaschek, a researcher at the digital privacy resource ProPrivacy, stated that identity theft committed through insurance scams is dangerously on the rise in the United States and throughout the world.
All car and home owners need to be aware of this scam, which is growing more and more prevalent.
Tomaschek claims that these callers frequently engage in pushy sales techniques and make unbelievable offers. Similar tactics are used by those who conduct business via email, making their offer seem urgent or restricted in time.
According to Tomaschek, “the phishing email will be structured particularly to appear official and as though it is being sent by a real and well-known insurance firm and will persuade the recipient to click on a link or download an attachment to access the limited-time offer.”
However, the link will direct the receiver to a phishing website intended to steal their private financial and personal information, and any attachment will generally contain malware that might give the attacker access to the victim’s device and private data.
Read: How they calculate car insurance premiums
4. Overblown damages or injuries
When an accident or other catastrophe has already happened, the scam may occasionally just be the opposing party intentionally exaggerating losses.
“Victims of car accidents can also become even more victimized – sometimes by the occupants in the other car who exaggerate or fabricate injuries or by the repair shop that wants to charge them for fixes that aren’t necessary or even employ risky counterfeit parts,” Schaffer added.
According to Bill Martin, president and CEO of Plymouth Rock Home Assurance, this also occurs with home insurance.
In order to cover the deductible or simply to increase their own profit on the repair, Martin noted that “repairmen or contractors may offer to exaggerate the cost of the repair service supplied.”
“Remember, there are victims of all insurance overpayments. Basically, it is the price that honest individuals pay to purchase coverage.”
Check out: US states with the cheapest home insurance costs
Note: Skepticism and research are your strongest defenses against scams. Finally, be alert and contact your insurer directly if someone offers to file insurance claims on your behalf or pay your deductible. Most likely, something is wrong. Finally, you should avoid making these 3 home insurance mistakes.
You can also check here for highly informative tips on life insurance
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