Insurance Fraud: What It Is and How to Protect Yourself

Licensing & Compliance · InsureToday24 (BNW Services LLC), a licensed independent agency across MO, KS, NE, TN, OK, AR & CO.

# Insurance Fraud: What It Is and How to Protect Yourself

Insurance only works because most people pay in honestly and only claim what they're truly owed. Fraud breaks that deal. When people lie to get coverage or pad a claim, everyone else pays more in premiums to cover the cost. The National Association of Insurance Commissioners (NAIC) and the Insurance Information Institute (III) both point to fraud as one of the biggest hidden drivers of insurance prices in the country.

This guide, from BNW Services LLC (dba InsureToday24), a licensed independent agency serving Missouri, Kansas, and parts of Nebraska, explains the two sides of insurance fraud — fraud committed against insurers, and fraud committed against you, the consumer — and how to stay on the right side of both.

The Two Kinds of Insurance Fraud

Fraud against insurers is when a policyholder, claimant, or sometimes a provider lies to get money they aren't owed. Common examples:

That last one matters more than people think. Shading the truth on an application to get a cheaper rate is called rate evasion or material misrepresentation, and it's still fraud. If the carrier later discovers it, they can rescind the policy or deny a claim — leaving you with no coverage when you need it most.

Fraud against consumers is when someone lies to *you*. This includes fake agents, fake carriers, and scammers who collect "premium" payments and disappear. We'll cover how to spot those below.

Why It Matters in Missouri and Kansas

Insurance fraud is illegal in both states and is taken seriously by regulators. The Missouri Department of Commerce & Insurance (insurance.mo.gov) and the Kansas Insurance Department (insurance.kansas.gov) both investigate fraud complaints and can refer cases for prosecution. Penalties can include restitution, fines, license revocation for agents, and criminal charges.

For honest households, the cost shows up quietly — in higher premiums across the board. The III estimates fraud adds meaningfully to what every policyholder pays. So protecting the system protects your own wallet.

How to Protect Yourself From Insurance Scams

Scammers target people shopping for coverage, especially when money is tight. Here's how to stay safe:

1. Verify the agent and the agency are licensed. Every legitimate agent in Missouri and Kansas holds a state license you can look up. BNW Services is a licensed independent agency — you can confirm an agent's standing through the Missouri Department of Commerce & Insurance or the Kansas Insurance Department. If someone selling insurance won't give you a name and license you can verify, walk away.

2. Verify the carrier is real and admitted. A real policy is backed by a real, financially regulated carrier. You can look up a company's licensing and financial details through the NAIC (naic.org), and confirm whether it's admitted to write business in your state through the Missouri or Kansas insurance department. As an independent agency, we place coverage with the carriers we represent — and you'll always see the actual carrier's name on your policy documents, never a vague "in-house" plan.

3. Be careful how you pay. Legitimate premium payments go to the carrier or to a licensed agency through traceable methods. On insuretoday24.com, site payments run through Square checkout, and embedded quoting apps like ePremium (renters) and BackNine (life and annuity) connect you to real carriers. Be suspicious of anyone demanding gift cards, wire transfers, cash apps to a personal account, or "today only" pressure to pay before you've seen a policy.

4. Read before you sign. Get the coverage, limits, deductibles, and carrier in writing. If a "policy" has no declarations page and no carrier name, it isn't real coverage.

5. Guard your personal information. Fraudsters fish for Social Security numbers, bank details, and driver's license numbers. Federal privacy rules (the Gramm-Leach-Bliley Act, enforced in part by the FTC) require financial firms to protect that data. A real agency collects only what's needed to quote and bind — and explains why.

How to Keep Your Own Claims Above Board

You don't have to be a scammer to accidentally cross a line. Keep your claims clean by:

Accuracy isn't just ethics — it's what keeps your claim from being denied later.

Reporting Suspected Fraud

If you suspect fraud — whether someone tried to scam you, or you saw a staged claim — you can report it to the Missouri Department of Commerce & Insurance or the Kansas Insurance Department through their consumer-complaint channels. The NAIC also maintains consumer resources for reporting and verifying.

We're Here to Keep It Honest

The simplest protection is working with a licensed, local independent agency that names its carriers and explains every line. If something about a policy, payment request, or "agent" feels off, call us first. Reach Lucy, our AI receptionist, at (573) 594-5148, or start a quote at insuretoday24.com. We'll help you confirm what's real before you pay a dollar.

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