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You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

You could be taking a gamble with your insurance agent

Most insurance agents just want to make a living as you do. They want to put in their hours, go home and draw a paycheck. Sadly, like any other profession, some bad apples do exist — individuals who prey on the trust of innocent people.

When most California residents hear the words "insurance scam," they think of an individual defrauding an insurance company. However, the antithesis also occurs. Not all insurance agents are trustworthy or honest, and an agent may attempt to defraud you out of thousands of dollars of your hard-earned money.

Be wary of these insurance scams

The individual attempting to defraud you may use one of the following scams:

  • An agent sells you coverage that doesn't exist. In many cases, the company doesn't even exist. You may receive official looking documentation and pay premiums, but when you have a claim, no coverage exists.
  • An agent convinces you to purchase coverage you really don't need. It is often expensive as well.
  • You send or give your premiums to your insurance agent, who simply keeps them.

Your agent may also convince you to make investments in something such as viaticals (life insurance policies on the lives of the terminally ill) or promissory notes. They promise quick and profitable turnarounds for your money. As the old saying goes, "If it sounds too good to be true, it probably is."

A healthy dose of suspicion could save you thousands of dollars

Before purchasing any insurance product from anyone, you may want to consider the following:

  • Contact the Better Business Bureau to check for complaints.
  • Contact the California Department of Insurance to check up on your agent and the company.
  • Be wary of offers with premiums that range from 30 to 50 percent less than those charged by other companies. Some savings may be okay, but claims such as those may need testing.
  • You shouldn't have to make premium payments in cash or directly to your agent.
  • You shouldn't have to pay in cash.
  • You could have a problem if the agent can't or won't answer your questions.
  • Keep records of any documentation you receive and of your premium payments.
  • Review your current coverage. It may already cover that expensive new coverage.

Feel free to ask questions, take your time and only purchase when you feel satisfied with the information you received and feel ready to do so. Your insurance agent owes you a duty to ensure that you receive coverage suitable to your situation. Breaching that duty could require you to take legal action.

It can sometimes be difficult to determine whether your insurance agent took advantage of you, so it might help to bring in an attorney with experience in spotting insurance fraud. He or she can also guide you through any negotiations or litigation needed in order to help compensate you for your losses.

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