Unauthorized Insurance

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.


Filed Under:

comments powered by Disqus
Hot Definitions
  1. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  2. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  3. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  4. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  5. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  6. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
Trading Center