Red Flags: How to Spot Insurance Scams

Insurance is supposed to protect you, so it's especially frustrating when scammers use it as a way to take advantage of people!

Whether you're a homeowner, a small business owner, or just trying to do the right thing for your family, knowing how to spot a fraudulent scheme can save you thousands of dollars and a whole lot of headaches.

Here are some red flags to watch for when looking for the right insurance company to work with.

Red Flag #1: Suspicious Cold Calls and High-Pressure Sales Tactics

If someone calls you out of the blue, pushing an insurance deal that has to be decided “right now,” slow down. Legitimate insurance agents don't pressure you into same-day decisions or demand immediate payment over the phone.

Other cold-call warning signs include refusing to provide you with their license number, or asking for personal information, like your Social Security number, right away. Actual insurance agents know how big a deal choosing the right insurance is, so they will be happy to answer questions to help their clients feel comfortable with their decisions.

Here's a simple way to vet the agent: Any licensed insurance agent in Minnesota can be verified through the Minnesota Department of Commerce License Lookup. If they're real, they'll be there. If they get weird when you ask for their license number, you have your answer.

Red Flag #2: Fake Insurance Companies and Policies

Scammers don’t stop at pretending to be agents. Some will even go out of their way to build entire fake insurance companies – crazy, we know!!

You should be able to find a lot of information on their website, so always ask for it! If they can’t provide one or if it looks really vague or low-quality, listen to those alarm bells going off inside your head.

Another big red flag is if they can’t give you a physical address, or just talk about vague “national headquarters.” Almost all insurance agents have physical offices and won’t hesitate to provide that information.

And, never, ever give in to pressure to pay via wire transfer, gift cards, or cash apps. Once you’ve opted for these types of payment options, it’s nearly impossible to get your money back from the scammer!

Certain groups such as seniors, immigrants, and small business owners are disproportionately targeted because scammers assume they may not know what a standard policy looks like. Working with a local, independent agency like Rehm Insurance means you have someone in your corner who knows what legitimate coverage looks like and can help you spot scammers.

Red Flag #3: Post-Disaster Scams and Storm Chasers

Southern Minnesota gets its fair share of severe weather, and unfortunately, scammers know it. After a major storm, fraudsters show up fast. 

Always watch out for contractors who demand large payments upfront or strangers who knock on your door claiming to be already working in your neighborhood. Be careful about pushy insurance representatives and adjusters, too. 

Sketchy adjusters are famous for pushing people to sign over their rights before they’ve had a chance to read anything, so if you feel like that’s happening to you, take a pause. Insurance claims always follow a process, so it’s rare that someone could “speed up” your claim. 

The next time a storm hits, just remember this: Don't sign anything under pressure, and always verify who you're dealing with before agreeing to anything.

Red Flag #4: Online, Text, and Social Media Scams

Digital scams have gotten sophisticated, so unfortunately, you need to pay attention to your email inbox, texts, and social feeds, too.

Always look out for things like fake comparison websites that collect your info and sell it, or worse, just take your money. Social media ads promising ridiculously low rates with next to no detail are usually scams, too. Remember, if it looks too good to be true, it probably is.

Scammers will jump into your inbox, too, with phishing emails designed to look like they're from your actual insurance company, or unsolicited texts with links and urgent language like "Your policy is about to lapse. Act now!"

A good rule of thumb: if you didn't initiate the contact, don't click the link. Go directly to your insurer's official website or call your agent directly.

What To Do If Something Feels Off

Trust your gut. If an offer feels weird, it probably is. If you've already fallen for a scam, document everything and report it immediately to the state and to your real insurance carrier.

Here's how to protect yourself from insurance scams:

• 
  Verify the agent's license on the state website
• Ask questions – any legitimate agent will welcome them
• Never pay with gift cards, wire transfers, or cash apps
• Report suspected fraud to the Minnesota Department of Commerce 

Work With Someone You Actually Know

The best defense against insurance scams is having a real, local agent you can call by name.

At Rehm Insurance, we're not a 1-800 number or a chatbot. We're your neighbors in Mankato, and we're here to make sure you have coverage you can actually count on!

Schedule a no-obligation consultation with our team today. We'll review your current coverage, answer your questions, and make sure you're protected – as any good neighbor would!