READYColorado Blog: Title: Get Insured Colorado: Avoiding Insurance Pitfalls and Scams
Our last Get Insured Colorado topic is avoiding insurance pitfalls and scams. Most insurance pitfalls result in paying higher premiums or the loss of insurance coverage. Insurance scams can be avoided by following these three steps: stop, call and confirm.
Common Insurance Pitfalls
Avoid common pitfalls that may result in paying higher premiums or even losing insurance. Consider carrying a higher deductible. It will save you money on your premium and discourage you from filing small claims that may put you at risk for non-renewal.
Do routine home maintenance check-ups. Preventing damage from water losses and other typical in-home disasters that can often be avoided may save you from future headaches and financial risk.
Get insurance early! Learn the claims history on the property you own and the property you're buying. If you want to know of prior losses that may impact the availability or price of your new home's insurance, ask the seller to provide a copy of the home's loss history report (called a CLUE ® or A-PLUST Report) with the disclosure statements. This is a record of home insurance claims that have been reported or filed in the past five years. Finding out what claims have been filed in recent years, such as water loss claims, can affect whether the property is considered higher risk. When you're selling your home, also make sure you know what the loss history is on your own home.
Do your homework. To order a CLUE ® Report, see www.choicetrust.com. To order a copy of your A-PLUST Report, call 1-800-709-8842.
Key Consumer Tips
The more information you have going into the home buying process, the less likely you are to encounter pitfalls along the way. You wouldn't even think about buying a used car without knowing its history. The same goes for your dream home.
- Ask about extra coverage.
- Replacement cost coverage for possessions.
- Extended or guaranteed replacement cost coverage for the structure.
- Building code upgrades.
- Sewer and drain back-ups.
- Umbrella coverage if you have a lot of assets to protect or the property has high- risk features, such as a pool.
- Special riders for jewelry, collectibles and expensive items.
What can I do to prevent being a victim of fraud?
Stop. Call. Confirm. If you are unsure about an insurance company or agent, STOP before signing any paperwork or paying any money; CALL the Division of Insurance - 303-894-7490 / 800-930-3745 to CONFIRM that the company or agent offering insurance is legitimate and licensed to sell insurance in Colorado. You can also verify the license of your agent and the insurance company on the DOI website, and even see if any disciplinary actions have been issued. Visit AskDORA.colorado.gov and click on “Verify a License.” Taking such precautions won’t bother honest agents and insurers.
If you believe you have been the victim of insurance fraud, or are aware of fraudulent activity, take action by filing a report with the Online Fraud Reporting System, a system from the National Association of Insurance Commissioners (NAIC - the Colorado DOI belongs to this group).
What is insurance fraud?
Fake insurance companies or agents defraud consumers by taking money for premiums on bogus policies with no intention of paying claims. Scammers may offer policies at costs that are significantly lower than competitors’ prices. They might be difficult to reach by phone, if there is even a listed phone number. Always find out if the agent represents a legitimate, licensed insurer before purchasing a policy. Contact the DOI or visit AskDORA.colorado.gov to verify the agent or company.
There are also legitimate, companies that sell non-insurance products marketed to look like real insurance. For example, an agent working for a company selling health discount plans might call it insurance when it is really an unregulated, non-insurance product. If you have questions about the insurance you’re being sold, contact the Division of Insurance - 303-894-7490 / 800-930-3745 / DORA_Insurance@state.co.us.