Victoria Berezhetska When it comes to illegal or deceptive practices in the insurance industry, it is not difficult to identify them—overcharging clients, making misleading statements, stalling, or minimizing claims.
Naturally, federal law prohibits such fraudulent practices as sliding. For instance, the OIR in Florida issued a memorandum back in 2015 regarding the sliding practices in the insurance industry. It was based on numerous reports proving that insurance agents took advantage of their clients. That memorandum was meant to serve as a reminder of the Unfair Insurance Trade Practices Act.
And while some of the insurance producers can try to justify the half-truths and give promotional speeches, the misdeeds remain evident.
Understanding such unfair practices as sliding can help you identify when you are tricked into overpaying for the insurance coverage, lied to, or manipulated into taking out more insurance than you need.
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Sliding Explained
As mentioned before, sliding is an unethical practice used to misrepresent or conceal detailed information on the coverage. How do insurance agents use it? In a nutshell, they get consent from clients and trick them into purchasing more or paying extra for the insurance products and services the insurance transaction incorporates.
The Michigan Department of Insurance and Financial Services states that the failure to disclose the relevant information to clients is considered a demonstration of bad faith. So if your provider offers you a homeowners policy with an auto policy included at no extra charge, that should be a significant cause for concern. As you know, the only free cheese is in the mousetrap, which means that there is no way the auto policy can be free of charge.
Are Your Insurance Agents Acting in Bad Faith?
Unfortunately, policyholders realize that they were deceived into overpaying or overinsuring too late. It often happens after paying the premiums or reviewing the costs at best.
Here are the typical examples of sliding:
- Stating that any add-on is a part of the insurance plan when, in fact, it is not.
- Claiming that an add-on is required to purchase a policy.
- Failure to provide detailed information on all types of coverages and their costs.
- Misrepresenting the actual cost of the coverage.
- Charging extra for a specific service or product with no informed consent received from the client.
Naturally, that is only a fraction of what can be defined as insurance sliding. These examples only slightly illustrate what policyholders might handle when insurance agents act in bad faith.
But are there ways to deal with such fraudulent actions? There sure are. In fact, engaging in insurance sliding can be punished by the law. According to the MCL 500.1239(1)(h), a person engaging in fraudulent or dishonest practices or demonstrating untrustworthiness will face liable punishment and sanctions.
The punishment may differ depending on the severity of the agent’s actions. It can include probation, suspension of the license, or financial penalties.
If you happen to face such fraudulent practices as sliding, you should report them without further delay. Bear in mind that sliding violates federal law and should not be tolerated.
Suppose you have any questions or concerns about the actions of your insurance agent. In that case, we recommend contacting the local Department of Insurance and Financial Services or the Office of Insurance Regulation (OIR).
Victoria is a Senior Content Writer at American REIA. She helps customers find the right educational material through easily-digestible blog posts and buying guides backing their insurance coverage choice. Victoria covers the latest industry news and various insurance topics, including auto, home, health, and life insurance.
