Auto Insurance Fraud Victims Seek Answers
BROCKTON - Tania Deandrade made a $500 down payment, then paid $146 for three months. Joy Zaccardi paid almost $1,000 up front on her policy for a new vehicle.
And Gabriel Depina paid $280 for five months on a premium he considered affordable due to having several points on his license.
But what they all discovered within the last week is that none of them had active auto insurance policies.
They all say they had been paying their agent, Whitman's Glenn Paul Pearson and Brockton-based CHC Insurance Agency, but found out they weren't insured after reading a story in The Enterprise last weekend about alleged fraud at his brokerage.
Pearson, 62, reported to federal prison on Thursday on an unrelated tax embezzlement conviction, but faces several new criminal complaints for fraud by an insurance agent or broker and larceny over $250.
Experts say insurance fraud is rampant throughout the country, but consumers can take steps to prevent themselves from becoming victims - and getting their money back if they are a victim.
"Most agents are honest and forthright, but a disturbing minority of agents are crooked and will steal your premiums and issue phony policies to placate clients who think they're covered," said James Quiggle, a spokesman for the Coalition Against Insurance Fraud.
The new accusations began on Feb. 22, when a Brockton woman told police she learned she hadn't been insured for months despite paying $210 a month to CHC Insurance since September. The woman had been involved in a crash the previous week and learned she didn't have insurance when she tried to process a claim.
The state Office of Consumer Affairs and Business Regulation reports companies and consumers suffer tens of billions of dollars in insurance fraud costs each year.
The Enterprise has learned that Brockton police have taken out four criminal complaints against Pearson - four counts of fraud by an insurance agent or broker and three counts of larceny over $250. He will face clerk magistrate's hearings at a later date to determine if criminal charges are issued. Weymouth police also told The Enterprise that they anticipate filing charges against Pearson as one of the victims lives in their town.
The Coalition Against Insurance Fraud, a Washington, D.C.-based nonprofit, says consumers can take several steps to protect themselves when shopping for insurance.
If the quote for the premium seems too good to be true, it might be, Quiggle said.
If the agency demands you pay by cash and can't produce receipts, take it as a warning sign, he said.
"The dishonest agent will pocket your premiums and not send the money over to the insurance company, then issue you a bogus policy," he said. "You should always call the insurance company within a month to confirm you are successfully covered and your policy is paid in full." Experts say the bad agents hurt the reputation of those who run reputable brokerages.
"It disturbs me more than you can imagine when one bad insurance agent hurts an innocent client and the hard work that I have done to maintain an exceptional reputation," said Daniel Morse, president of Easton-based Morse Insurance Agency.
"Unfortunately, no matter the occupation, there are a few bad people that make the entire occupation look bad." The coalition spokesman said crooked agents may try to underbid the competition by quoting a policy well-below all other premiums. He said that is a signal to think twice and shop around.
"Independent agents represent the best interest of our clients day in and day out," Morse said. "It is incredibly important to respect the trust our clients put in us. It is a responsibility that independent agents take very serious." People who believe they are a victim of insurance fraud should contact the state Consumer Services Section and the Insurance Fraud Bureau.
Victims should also file a report with their local police department.
For some, getting their lost money back can be as easy as calling the company their agent gave them a policy - real or not - for.
"They're dealing with a dishonest agent, they will want to know so they can cut loose from an agent who could be tarnishing a good name," Quiggle said. "Sometimes the insurance company may pay the claim as a courtesy gesture." Quiggle said victims can pursue a civil lawsuit depending on the amount of money lost or hope criminal charges result in a court conviction and the defendant is ordered to pay restitution.
In Pearson's case, he is set to spend the next 48 months at the Devens Federal Medical Center in Ayer. His clerk magistrate's hearings on the new insurance fraud complaints hadn't been scheduled as of Friday afternoon. Pearson was ordered by the state Division of Insurance on Jan. 22 to cease all business operations and turn in his license.
"Insurance fraud can cause all kinds of misery, including out-of-pocket expenses," Quiggle said. "You first need to see if you can work with the insurance company to make the situation whole again."
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