Buying Insurance on the Internet - Shopping Tips and Dangers
(February 2012)
The Internet is an easy way to find information about insurance. You can use it to research companies and agents, compare insurance rates, and buy insurance.
But with all its conveniences, the Internet can also be a dangerous place for your personal information. When shopping on the Internet, it’s a good idea to take a few extra precautions to protect yourself.
Quick Tips
- Take time to gather information, evaluate your needs, and buy coverage based on your research. Always begin with the assumption that if an insurance deal seems too good to be true, it probably is.
- Buy only from licensed companies and agents. Learn a company’s license status, complaint history, and financial rating by calling the Texas Department of Insurance (TDI) Consumer Help Line at 1-800-252-3439 or by visiting our website at www.tdi.texas.gov.
- Be cautious of email insurance offers that you didn’t ask a company or agent to send you.
- Be careful if someone asks you to drop one type of policy or coverage for another type.
- Talk to an accountant, attorney, financial adviser, or a trusted friend or relative before putting savings or large sums of money into any trust, annuity, or other investment.
- Get rate quotes and important information in writing and keep records.
- Keep a copy and a file of anything you completed online or received in the mail and signed. Also keep any other insurance documents, including the policy, letters, advertisements, premium payment receipts, notes of conversations, and any claims submitted.
- Make sure you receive your policy – not a photocopy – within 30 days. If you don’t, call the insurance company, not the agent. If you need a company’s toll-free number, call TDI’s Consumer Help Line.
Shopping Online
Use these state resources to help you shop for insurance online:
- HelpInsure.com is a service of the TDI and Office of Public Insurance Counsel (OPIC) that helps you compare sample rates, policy and complaint information, and the financial ratings of companies writing residential property and auto insurance.
- OPIC’s website at www.opic.state.tx.us provides online policy comparison tools that allow you to compare homeowners, renters, condominium, and auto insurance coverages by company and policy.
- TexasHealthOptions.com provides information about health care coverage and your options.
Cyber Fraud
Insurance fraud is nothing new, but the Internet provides dishonest people with more opportunities to commit online fraud. The Internet allows people to remain anonymous and open or close stores in a couple of minutes. Here are some common cyber fraud schemes to look out for:
- Copycat websites with company logos. The fake website promises a consumer insurance coverage from what appears to be a reputable insurance company. The consumer later learns the real company never received the application or payment.
- Agents stealing premiums. Premium theft happens when an agent who advertises on the Internet provides a fake policy or proof of insurance card and keeps an annuity or insurance payment.
- Sale of fake insurance. These sales happen when a website offers insurance at a low rate, but you later learn that the insurance company is fake and the policy is worthless.
- Multi-level marketing or pyramid schemes. These schemes begin with an email or Internet website that offers something of value – such as an insurance policy – if you pay a membership fee. New members are told they can sell memberships or borrow money against their insurance policies and use that money to get credit cards and certificates of deposit. Members are not told they can only borrow against a policy’s cash value, which is usually zero in the first year.
Unauthorized Insurance
The most common type of cyber fraud is selling insurance without a state license. If a company is not licensed by TDI, it may not pay your claims and you could lose your premium payments. Call TDI’s Consumer Help Line to check a company’s or agent’s license status.
Notify TDI if somebody tells you an insurance product isn’t insurance and is exempt from state regulations, or if they tell you they don’t need a license to sell a particular type of insurance. This is a common insurance fraud pitch. If you suspect insurance fraud, call TDI’s Consumer Help Line
1-800-252-3439
Privacy Concerns
The Internet provides access to information, products, and services, but it also allows companies to collect personal information about you that can be shared with others. Safeguard your privacy online by following these tips:
- Think before you give out personal information. Keep your address, telephone number, Social Security number, email address, credit card number, and medical information private unless you know who is collecting the information, why they’re collecting it, how it will be used, and how disclosure benefits you.
- Look for an online privacy policy. Many companies post privacy policies on their websites, including how any information collected will be used and protected from improper disclosure. If you can’t find a policy, send an email to the webmaster or website asking for the company’s policy on privacy and information security.
- Don’t allow companies to share your personal information. Many companies ask whether they can share your personal information with other companies.
Security on the Internet
The Internet is enticing because it’s always open for business. Make sure your online transactions are secure by taking the following precautions.
- Ensure you’re using the current version of your browser and that your security preferences are set. Secure browsers can encrypt your credit card numbers and personal information, confirm the identity of websites, and notify you if a website looks suspicious.
- Before you enter your credit card number or personal information, make sure the website address begins with https:// and there is a key or lock security symbol on the bottom corner of the browser.
- Don’t enter any information if you’re unsure. If your browser is not secure or you do not want to submit the information over the Internet, contact the company or agent and ask about submitting it by phone, fax, or regular mail.
- Keep passwords private. Use a combination of numbers, letters, and symbols. Don’t use any part of your telephone number, birth date, Social Security number, or address.
- Keep records. Print out copies of orders or any forms you fill out online.
- Pay with a debit or credit card. In most cases, you will only be responsible for paying the first $50 in unauthorized charges on your card. Do business with companies you know. Anyone can set up an electronic storefront on the Internet. If you’re not familiar with the agent or company, ask for more information or references.
For More Information or Assistance
For answers to general insurance questions, for information on filing an insurance-related complaint, or to report suspected insurance fraud, call the Consumer Help Line between 8 a.m. and 5 p.m., Central time, Monday-Friday, or visit our website
1-800-252-3439
463-6515 in Austin
www.tdi.texas.gov
You can also visit HelpInsure.com to help you shop for automobile, homeowners, condo, and renters insurance, and TexasHealthOptions.com to learn more about health care coverage and your options.
For printed copies of consumer publications, call the 24-hour Publications Order Line
1-800-599-SHOP (7467)
305-7211 in Austin
To report suspected arson or suspicious activity involving fires, call the State Fire Marshal’s 24-hour Arson Hotline
1-877-4FIRE45 (434-7345)
The information in this publication is current as of the revision date. Changes in laws and agency administrative rules made after the revision date may affect the content. View current information on our website. TDI distributes this publication for educational purposes only. This publication is not an endorsement by TDI of any service, product, or company.
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