Unauthorized Insurance

AAA

DEFINITION of 'Unauthorized Insurance'

A phony plan that claims to provide financial protection against unforeseen and potentially catastrophic events. Unauthorized insurance is a scam that some unscrupulous individuals posing as insurance agents use to collect "premiums" from unwitting consumers. The "agents" take the money and run, and the consumers are not only out the "premium" money, but are left without insurance.

INVESTOPEDIA EXPLAINS 'Unauthorized Insurance'

Unauthorized insurance scams are especially problematic when the consumer does not find out that they have been cheated until they try to file a claim, because then they will find themselves unexpectedly on the hook for thousands of dollars when they thought they were insured. To protect themselves, consumers can check with their state's insurance department to find out if an insurance product they are being offered is legitimate. They should perform this due diligence before giving any money to the insurance company.

RELATED TERMS
  1. Unauthorized Insurer

    A company that poses as an authorized provider of a financial ...
  2. Unauthorized Investment

    Any investment that has not been specifically authorized by a ...
  3. Fake Claims

    The term fake claims refers to insurance claims that are made ...
  4. Insurance

    A contract (policy) in which an individual or entity receives ...
  5. Fiduciary

    1. A person legally appointed and authorized to hold assets in ...
  6. Underwriting

    1. The process by which investment bankers raise investment capital ...
Related Articles
  1. Home & Auto

    A Look At Single-Premium Life Insurance

    Want to provide for your dependents and finance your own long-term care? Learn more here.
  2. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  3. Insurance

    15 Insurance Policies You Don't Need

    Learn how to save money by saying "no" to unnecessary coverage.
  4. Home & Auto

    5 Insurance Policies Everyone Should Have

    Insurance policies come in a wide variety of shapes and sizes. Shop carefully and the right policies will go a long way towards helping you protect your assets.
  5. Options & Futures

    Beginner's Guide To Auto Insurance

    Find the perfect policy that suits both your coverage and budgetary needs.
  6. Home & Auto

    Life Insurance Clauses Determine Your Coverage

    Understanding these key parts of your policy will help you to ensure that your family will be covered.
  7. Insurance

    Life Insurance: Putting A Price On Peace Of Mind

    Would your death leave loved ones financially stranded? Find out how to ease your mind and keep them protected.
  8. Insurance

    How to Use a Waiver of Subrogation

    A waiver of subrogation means that a party to a contract waives the right to allow someone (usually an insurance company) to sue the other party to the contract in case of a loss.
  9. Insurance

    How the Affordable Care Act Changed Insurance

    6 Ways Obamacare Impacts the Health Insurance Marketplace
  10. Insurance

    Why You Don’t Need Mortgage Protection Life Insurance

    Mortgage protection life insurance sounds great in concept - a guarantee that your mortgage will be paid off if you die unexpectedly. But take a hard look at what you get before choosing it.

You May Also Like

Hot Definitions
  1. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  2. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  3. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  4. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
  5. Absorption Costing

    A managerial accounting cost method of expensing all costs associated with manufacturing a particular product. Absorption ...
  6. Currency Carry Trade

    A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase ...
Trading Center