In these uncertain economic times, financial scams are proliferating and an industry association has offered tips on how consumers can protect themselves and their families from this type of fraud.
The National Association of Insurance Commissioners says the fraudsters prey particularly on those who, faced with tightening domestic budgets, are looking for ways to save on insurance costs.
Therefore, even while searching for "good deals" Americans should beware of purchasing a policy without thoroughly researching it.
"What seems too good to be true often is," says NAIC CEO Therese Vaughan, adding, "Consumers need to be extremely careful not to take a shortcut with their insurance, which in the long-term can affect the safety and security of themselves and their loved ones."
The organization stresses the first step is always to verify that the company or agent offering insurance is legitimate and licensed in the state.
Thoroughly reading the explanation of benefits is also extremely important before signing any paperwork.
NAIC also cautions Americans to be on the lookout for "hidden fraud" which happens when an employee of a legitimate insurance company acts dishonestly for personal gain. If your insurance card or any other documents fail to arrive in mail, you should contact the company as soon as possible.
Customers who suspect fraud have a range of options, including contacting state insurance department to file a complaint or completing an online form provided by the Online Fraud Reporting System.