How can I tell if someone offering me insurance is a legitimate and authorized agent?
In most parts of the world, the insurance industry is highly regulated. Strict laws apply to both insurance companies and independent workers across the industry. On top of legal requirements, associations and consumer protection organizations enforce even more exacting standards.
Insurance companies are regulated and regularly audited and stress tested to ensure they have the financial strength to uphold their fiduciary responsibilities and can pay claims even in the worst case scenarios (see An Intro to Reinsurance: How It Works and How It Benefits You to learn about one aspect of this).
Similarly, insurance salespeople (the brokers and agents consumers deal with directly) are required to pass certain exams and undergo a background check in order to get licensed. Once licensed, they must uphold strict ethical standards and abide by a code of conduct that is usually enforced by the relevant public organizations and associations (for more on what's involved, see Insurance Industry Careers: What They Are and How to Get Them).
With all that protection in place, you can be almost certain that legitimate insurance companies and their representatives will not scam you. With that being said, the first thing to consider is how the insurance salesperson you're dealing with presents themselves. All insurance salespeople are required to present themselves in a professional manner and show a high level of knowledge and competence. So listen to your gut. If you feel iffy about their competence, you might want to dig deeper.
Insurance salespeople are also required to be associated with an insurance brokerage or directly with an insurer. If you want to make sure they're affiliated with the organizations they claim to be, you can always call up their offices to verify the identity of the salesperson you've been dealing with. If they've never heard of this person, you should be cautious when dealing with them.
And lastly, where I am licensed, we have an Insurance Council and a Financial and Consumer Services Commission that regulates and administers all the brokers. Many of them have a database on their website that you can use to look up licensees. If you can't find the broker's name on the database, that might be a red flag.
Luckily, I haven't heard many stories of people pretending to sell insurance in order to defraud people. But when it comes to something so sensitive, it pays to be extra careful.
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