Chaney: Insurance fraud effects everyone

Below is an opinion column by Mike Chaney:

Mississippi Insurance Commissioner Mike Chaney says although the overwhelming majority of insurance agents and companies are honest and reputable, there are some bad actors.

Insurance fraud is not a victimless crime. It's been around for as long as insurance, and it costs businesses billions of dollars each year – an expense that is passed on to consumers in the form of higher premiums. Although the overwhelming majority of insurance agents and companies are honest and reputable, there are some bad actors.

My office deals with common scenarios, including scammers offering fake policies at costs that are significantly lower than competitors' prices; legitimate companies selling non-insurance products marketed to look like insurance; and dishonest insurance agents "pocketing" a policyholder's premium payment, instead of sending it on to the insurance company, as they should, leaving the consumer without coverage.

In 2025, the Mississippi Insurance Department (MID) Investigations Division investigated over 800 complaints. Over 400 of those were fraud-related. MID recovered more than $1.1 million for consumers following our investigations.

Companies and agents aren't the only ones guilty: dishonest contractors also run scams. After a disaster, fraudsters and scam artists often arrive quickly. Sometimes, they even come from out of town to take advantage of people. Contact your insurance company as soon as possible to file a claim. Your insurer will verify the repairs that need to be made. Make sure the contractor you hire for home repairs is legitimate. Search for the company online and read reviews. Find out if there are complaints against the contractor with the Better Business Bureau or the Attorney General's office. Finally, verify that the contractor is licensed by the state Board of Contractors.

Consumers can also be guilty of insurance fraud. The most common forms of policyholder fraud relate to auto insurance and workers' compensation. Deliberately staging an accident, exaggerating a legitimate claim, or knowingly providing false information on an application are all examples of insurance fraud, which is a crime.

According to the Coalition Against Insurance Fraud (CAIF), 3 of 4 insurance companies believe insurance fraud is growing, signaling a concern within the industry. A recent report from CAIF shows that $308.6B is stolen every year.

The National Association of Insurance Commissioners (NAIC) recommends following these tips to protect yourself from fraud:

* Don't ignore red flags. If you are suspicious, stop and call the Mississippi Insurance Department.

* Red flags can include an insurance company or agent that does not have a phone number or is hard to reach.

* Another warning is if you purchase a policy and do not receive an insurance ID card or a copy of your policy in a timely manner.

* If you have doubts, stop before signing any paperwork or paying your premium.

* Call my office and confirm the company or agent offering insurance is legitimate and licensed to sell insurance in your state. Legitimate agents and insurers will understand why you're taking precautions.

If you are a victim of insurance fraud or you are aware of fraudulent activity, call my office at 601-359-3569 or file a complaint online at www.mid.ms.gov. We work with consumers on these issues every day. We're here to help you.

Mike Chaney

Mike Chaney is Mississippi's 11th Commissioner of Insurance and State Fire Marshal. He is currently serving his fifth term in office.

-- Article credit to Mike Chaney for the Magnolia Tribune