When it comes to insurance policies, it’s crucial to be aware of what you’re buying. One term you may have heard of – but may not completely understand – is “twisting”. In this article, we’ll go over the definition of twisting insurance, how it works, and what it means for policyholders.
What is Twisting Insurance?
Twisting insurance is a fraudulent practice that involves convincing a policyholder to switch their insurance policy for another one, often with the same insurer. The new policy may have different terms, premiums, or coverages that may not be in the best interest of the policyholder. It’s important to note that twisting is illegal in many states and can result in severe penalties for those involved.
The practice of twisting can be done in several ways – over the phone, through mail, or in-person. A common tactic of twisting is to use misleading or false information to lure the policyholder into thinking the new policy is better than their current one. Some examples of misleading tactics include:
Using Misleading Information
Twisters may use false or misleading information to convince policyholders to switch their policy. For example, they may tell the policyholder that their current policy does not cover a particular damage or hazard, even if it’s not true.
Offering Unrealistic Benefits
Another tactic is to offer unrealistic benefits to the policyholder, such as promising lower premiums or better coverages than their current policy.
Twisters may also use tactics such as pressure or urgency to convince the policyholder to switch their policy quickly. They may say things like, “this offer is only available for a limited time” to make the policyholder feel the need to act fast.
How Does Twisting Affect Policyholders?
Policyholders who fall victim to twisting may be left with an insurance policy that does not meet their needs or may be paying higher premiums than they should. In more severe cases, twisting can even result in losing valuable coverage that was included in their previous policy.
Victims of twisting may also experience increased stress and confusion as they try to navigate the new policy and figure out if it meets their needs. In some cases, twisting can lead to financial consequences if the policyholder experiences damages or hazards that are not covered under the new policy.
How Can Policyholders Protect Themselves from Twisting?
The best way for policyholders to avoid falling victim to twisting is to be informed and skeptical of any offers they receive. Some ways to protect yourself from twisting include:
Researching Insurance Policies
Before purchasing an insurance policy, do your research and make sure you understand the terms, coverages, and premiums. This will make it less likely for you to fall victim to twisting.
Don’t be afraid to ask questions and clarify any information that seems suspicious or unclear. If someone is pressuring you to switch policies, take the time to fully understand what you’re agreeing to.
Checking with Your State Insurance Department
If you’re unsure about an offer you receive or suspect that someone is trying to twist your policy, reach out to your state insurance department. They can provide you with information and resources to help you make informed decisions about your insurance policy.
The Bottom Line
Twisting insurance is a fraudulent practice that can have serious consequences for the policyholder. By being informed, skeptical, and asking questions, you can protect yourself from falling victim to twisting and ensure that your insurance policy meets your needs and expectations.
Is twisting a common practice in the insurance industry?
No, twisting is illegal in many states and is generally considered a fraudulent practice.
What should I do if I suspect someone is trying to twist my insurance policy?
Contact your state insurance department and report the incident.
Can a policyholder switch their policy if they want to?
Yes, policyholders can switch their policy if they want to. It’s important to do so with informed decision-making and without any fraudulent practices.
What are some signs that an offer to switch policies may be a result of twisting?
Common signs of twisting include using misleading information, offering unrealistic benefits or pressuring the policyholder to act quickly.