Insurance faces hit by fraud

   Insurance premiums as well as insurance scams have increased in the past couple of years.
   Scam operators sell phony coverage over the phone targeting individuals and small business owners, the National Association of Insurance Commissioners reports.
   According to the NAIC, the fraudulent companies recruit local insurance representatives to cover the target market.
   Often, these fraudulent companies will tell the agents that federal law—instead of state law—covers health coverage; such claims are illegal.
   Often coverage is offered regardless of the applicant’s health condition, at lower rates and with better benefits than from licensed insurers.
   The scam operation’s goal is to collect as many premiums as possible and then avoid medical payments by offering excuses for the non-payment.
   To avoid being caught in an insurance scam, individuals are encouraged to do research on companies before signing contracts or paying premiums.
   The Better Business Bureau, state insurance department and NAIC can help people choose an insurance company that is right for the individual or small business. Visit www.bbb.org for more information or to report fraud.