BE WARY WHEN BUYING INSURANCE ONLINE
TALLAHASSEE -- Florida’s Chief Financial Officer Tom Gallagher is warning consumers to be wary about buying insurance over the Internet. In recent months, the Department of Financial Services has received an increasing number of complaints from consumers who bought insurance online only to find they are unable to get claims paid or their premiums returned.
"Unfortunately, these consumers risk having not only their money stolen but their identities stolen as well," Gallagher said. "As consumers, we must be more than cautious in protecting our personal and financial information – we must be downright aggressive. Because of the Internet, we have more access and more options than ever, but we also have more risks."
Gallagher said consumers have reported not being able to find a physical address or a phone number for online businesses. Some consumers complained that they provided their credit card numbers to obtain information and were billed even though they never applied for coverage.
The complaints are related to various lines of coverage, from health insurance to travel protection.
For more than two years, the department has conducted a public education campaign urging consumers to "Verify Before You Buy." Gallagher is urging consumers to verify they are dealing with a licensed insurance company and read and understand all documents before signing any agreement. Since February 2001, the department has ordered some 200 entities, insurance agents, marketers and affiliates to stop unauthorized insurance transactions.
Online consumers have complained about companies based in other states and other countries. California-based International Union for Natural Health, also known as the Complementary & Alternative Medicine Plan, IUNHCAMP and Progressive Health Alliance, left Floridians with thousands of dollars in unpaid medical bills. The department issued a Cease and Desist Order against the entity in May 2003.
Companies based overseas also advertise and offer insurance coverage via the Internet. The department is investigating complaints from Floridians who said they could not stop the credit card charges, but it can be difficult to assist with problems involving companies based in foreign countries.
Online consumers also must be cautious about what they are buying, Gallagher said. Many discount package plans are available over the Internet, and some consumers confuse these plans with insurance policies.
Consumers can verify whether they are dealing with a licensed insurance company by checking the department’s web site at www.MyFloridaCFO.com or by calling the Consumer Helpline at 1-800-342-2762.