It isn’t a conspiracy theory, but insurance agents won’t make money if they pay too much claims. In other words, individual agents are looking for ways to avoid paying claims, if legally possible, especially by putting the blame on the insured party. In some cases, insurers are bad enough that they cheat and break the law to avoid a huge sum of money. Here are things bad insurers may do:
- Forgery: Insurance companies may forge our initials or signature on papers during the application process. For example, the insured party already signed the primary application, but the agent “forgot” to ask the person sign the rejection coverage form. So, when the person has an accident and submits a claim for specific benefits, they will look for ways to make it difficult for the insured to get claims. In this case, the agent will try to forge the signature by transposing any digital form of insured’s signature to any document required.
- 515 Exclusion: This could happen in any part of the insurance industry. For example, a family could purchase an insurance policy, but the husband has too many tickets or even a few DWI convictions. If the policy also covers the wife, the overall rates can be too high and it would be difficult for them to afford the premium. In this case, the family could buy the insurance using only the wife’s name and it is called the 515 exclusion. It means that there will be no insurance coverage if the husband drives the car and an accident happens. Some agents will ask for the 515 exclusion form to be signed, but the names of the people who excluded are not written for specific reasons. So, when an accident happens and the wife didn’t drive the car, the agent will look for ways to avoid paying the claims. Agents could simply write new names in the forms, so, they will be excluded from the coverage.
- Fill in the blank: Agents typically help consumers to prepare the application and forms for commercial, health, life, homeowner, car and other types of insurance. They will ask us many questions, so it is possible for us to fill the forms quickly. However, agents know how each question should be answered and what details should be included in the form. In this case, it is possible for agents to fill the forms in a way that the claim can get rejected under specific conditions. Agents typically seek to complete the sales as soon as possible, so they can earn the commission quickly. Insurers typically rely on the fact the statistical probability are against claims being made. In fact, it is possible that the insurers accuse their own clients of fraud if a large amount of money needs to be paid. They deliberately make the form incomplete, so the claim won’t be made if possible.
It is important for customers to look for ways insurers can cheat them.