Ask HN: Insurance Agent Fraud? | Hacker News Reader

Ask HN: Insurance Agent Fraud?

3 pointsvoakbasda3 comments

My insurance agent recently made a mistake while fulfilling a request from a lender. In short, she added coverage to my home/farm policy for a piece of equipment that I already had on my auto policy, thinking it was a new identical piece of equipment. This effectively revealed that I have been paying five or six times more than was necessary to have the coverage required by said lender.

Upon reflection of this situation, I realized that a dishonest agent could easily steer clients into this kind of situation on purpose. Not sure whether she is on commission, but that would be sufficient motive.

Between Hanlon and Occam’s razors, I want to believe it was an honest mistake, but I wanted to hear the opinions and stories from this crowd. Is this kind of experience (un)common?

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Are you sure that you are paying 5 times more for the same coverage?

Insurance is all about the details and what is covered.

For a basic example, we have two different vehicle insurance "levels" in Denmark, lets call them basic and full.

Basic is required by law and only reimburses other parties for the damages you do, the full will also cover damages to your vehicle. But even the full there are multiple "knobs" to make the insurance cheaper for example the policy for car glass and also the self-paid portion (which can range from nothing to a few thousand dollars) and whether or not your insurance prices rise after you had an accident...

In general it is my humble opinion that the price follows the "predicted payouts" quite closely, so a cheaper insurance is usually also a worse insurance...

But YMMV.

I haven't used an insurance broker in over 20 years. It is easy and far cheaper to organize policies on-line. In my experience, lenders require proof of insurance, but rarely dictate who to insure with.

Of course brokers are incentivated by the commissions they are paid. In general I have found that brokers will always recommend the policies and insurance companies that pay the biggest commissions. Which is another reason to shop around. I have seen 2x and even 3x differences, but never 5x. So I would suspect that the amounts insured, scope of cover and deductibles are very different to explain to huge difference.

without numbers ?? full details, names blanked. As for ethics, you are aware that insurance agents are often used in medical experiments that snakes/rats/lawyers refuse to do for ethical reasons.. In essence, information that you have no expectation of discovery can be used to fatten someone...

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