Insurance broker fraud unfortunately happens. Insurance broker fraud can occur when a broker sells you a product different that what you were promised. Insurance broker fraud also occurs when the individual or brokerage is not licensed to sell the particular type of insurance. Similar to our post on Contractors, this post suggest some steps to protect yourself from insurance broker fraud.
“With friends like these”. We recently handled an insurance broker fraud case where the clients had “friends” who represented themselves as legitimate insurance brokers for a large, national company. Persuaded by these “friends,” the clients cashed out existing investments and bought the new policies – relying on representations that these would be suitable and our clients would pay a one-time premium. Yet, a year after paying the initial premium (a six-figure sum), our clients received invoices from the insurance carrier demanding additional, costly annual payments that had never been disclosed. These brokers got the commissions, and our clients were stuck in unsuitable policies that they could not afford. If our clients did not continue to pay, they would lose all their money previously paid. When they asked their “friends” for help, the “friends” said that our clients could cancel the policies, again resulting in a total capital loss. That’s when we got the call.
Always Check Credentials and Licenses. During our investigation we discovered, of the broker and sales reps involved, two were not even licensed to sell life insurance from the carrier during the time period when the policies were marketed and sold, while the third was not licensed at all! Similar to real estate brokers and licensees, the State of California provides a website where you can check an insurance broker’s or salesperson’s license status here.
About Adishian Law Group, P.C.
Adishian Law Group (https://adishianlaw.com) is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. As of November 2015, the firm has represented corporate and individual clients located across 22 California counties, 13 States outside of California and 9 foreign countries in over 480 legal matters. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco.
For more information about this article, contact Chris Adishian: