Insurance fraud is one of the most expensive crimes in the world. Each year, Americans lose billions to insurance scams in industries ranging from auto to healthcare.
However, by taking a few precautions, you can avoid foolish mistakes that land innocent people in scary situations.
Here are some basic preventive measures you can take to protect yourself against insurance fraud.
If you’re over 50, take advantage of massive discounts and financial resources
Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.
How to become a member today:
- Go here, select your free gift, and click “Join Today”
- Create your account (important!) by answering a few simple questions
- Start enjoying your discounts and perks!
Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.
Check incoming email addresses
Email scams aren’t just for boomers and the elderly — millennials are 77% more likely than their older counterparts to say they lost money to a scam that started with an email.
Don’t rely on the name or tagline of the email to check if it’s from a reputable source. Instead, check the address itself by hovering over the sender’s name.
The domain should be something like @bcbs.com (Blue Cross Blue Shield) or @uhc.com (United Healthcare), not an unintelligible or deceptive string of letters and numbers.
Get an itemized medical bill
The best way to avoid fraudulent medical charges is to request an itemized bill from your healthcare provider.
This typically isn’t the first bill they send, so you’ll have to request one from the billing or medical records department.
Check each item and look up its accompanying medical code to make sure you weren’t billed for services you didn’t receive.
Say no to bandit tow trucks
When you’re stranded on the road, the sight of a tow truck may bring a sigh of relief. But if you didn’t call for them, they’re probably not from AAA.
Known as “bandit tow trucks,” these fraudsters tow you to their yard, charge you exorbitant prices for services they’ve already rendered, and threaten to impound your vehicle if you don’t pay.
If you or your insurance company didn’t call for the truck, decline their services.
Resolve $10,000 or more of your debt
Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.
National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1
How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.
Don’t buy the first policy you find
Shop around for similar policies to determine the industry’s standard price range for the coverage you need. Be suspicious of extremely high and low prices.
Compare the features and advantages of each company and policy. Check online reviews about how well each company treats its customers and pays their claims.
Beware of windshield replacement scams
Be skeptical if an auto technician tells you you need a replacement if there are no visible signs of damage.
Scammers take your insurance and personal information and submit claim after claim in your name, which will increase your premiums.
Trending Stories
Check your employment status
Some employers avoid paying for worker’s compensation insurance by falsely claiming that their employees are independent contractors. So if you get hurt at work, you’ll be on the hook for the bill.
Check your state’s labor laws and ask your HR department about whether you’re covered by workers’ compensation insurance.
Understand your insurance plan
Knowing what’s covered can help you avoid outrageous and even fraudulent charges, especially when it comes to out-of-network care.
Bills from healthcare providers that aren’t in your network can be excessive, bordering on fraudulently inflated.
Review the stipulations of your health insurance plan and ask questions to the insurance provider if there’s something you don’t understand.
Get a copy of your policy and review it
Ask for a copy of your policy as soon as you can. All 50 states have a free-look period, ranging from 10 to 30 days, where you can review your policy and cancel without penalty if you find anything amiss.
Check the credentials of the agent and company
Legitimate agents won’t shy away from showing you their license and other credentials, but scammers will. Each state has an online database where you can look up this information.
If you buy a policy from an unregistered or illegal company or agent, you’re unprotected in case of an accident.
Earn cash back on everyday purchases with this rare account
Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!2
With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!
This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.
Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.
Take photos of your accident
If anything goes awry with your insurance claim, photos can provide proof of what happened.
This can prevent your insurance company from minimizing the damage or help you defend yourself against a staged accident, where another person slammed on their brakes or waved you forward to cause the crash.
Check repair receipts
Check that your auto mechanic isn’t milking your insurance for additional fixes or services by carefully reviewing your repair bill.
Make sure you only get the repairs you requested and that you’re not pegged with any extra charges.
If your premium goes up as a result of additional claims, you’re the one who gets to pay the additional costs.
Check your credit report
You can get a free copy of your credit report from each of the three credit bureaus (Experian, TransUnion, and Equifax) once a year.
This is more than just your credit score. Your report has a record of every financial and credit account you’ve opened or closed, as well as those that have gone to collections.
Check it for fraudulent activity at least once a year.
Get it in writing
If an insurance agent agrees to add anything to the policy or guarantees that something is covered, get those commitments in writing.
The company is unlikely to honor any coverage or agreements unless they’re spelled out in black and white and signed at the bottom, regardless of how reasonable your argument sounds.
Don’t sign blank insurance forms
It’s tedious and time-consuming, but be sure to fill out all the information yourself when you sign up for any type of insurance.
If you sign a blank form, the agent can put anything they like at the top, and you’ll have no idea what you’ve agreed to.
Verify the identity of incoming callers
When you’re unsure of whether an incoming call is really from your insurance company, use a reverse phone number website like Spokeo to look it up.
Don’t pick up calls from phone numbers you don’t recognize. If it’s really from your insurance company, they’ll send you a notice in the mail and/or leave you a voicemail.
If you suspect fraud, report it
If you’ve been scammed by an insurance agent or company, know that you’re not alone. Americans are defrauded of $308.6 billion every year by dubious insurance companies.
The only way to stop them from harming others like you is to report it. The National Insurance Crime Bureau is in place to help victims of insurance fraud, and you can remain anonymous if you like.
Bottom line
Even the most intelligent among us can fall victim to insurance fraud.
And even if you’re not scammed directly, the toll these charlatans take on insurance companies gets passed on to policyholders through higher premiums.
However, by taking some common sense precautions, you can avoid making yourself an easy target for fraudsters and keep more money in your bank account.
Lucrative, Flat-Rate Cash Rewards
FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment. Our partners do not influence how we rate products.
Wells Fargo Active Cash® Card
Current Offer
$200 cash rewards bonus after spending $500 in purchases in the first 3 months
Annual Fee
$0
Rewards Rate
Earn unlimited 2% cash rewards on purchases
Benefits
- Low spend threshold for its welcome offer — $200 cash rewards bonus after spending $500 in purchases in the first 3 months
- Cell phone protection benefit (subject to a $25 deductible)
- Can redeem rewards at an ATM for literal cash
Drawbacks
- Foreign transaction fee of 3%
- No bonus categories
- Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 19.74%, 24.74%, or 29.74% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don’t expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
Subscribe Today
Want extra-cash moves to come right to you?
Stop browsing endlessly. Get proven ways to earn pocket money, help cover rent, and crush your debt — sent to your inbox daily.