Date: August 17, 2006
For more information contact: Eileen Mallow, Assistant Deputy Commissioner, (608) 266-7843 or eileen.mallow@wisconsin.gov

Consumers Should Use Caution When Purchasing Insurance Online

Madison, WI—As insurance companies expand their businesses online, consumers need to be aware of ways they can find out if a company is reputable.

"At OCI (Office of the Commissioner of Insurance) we feel it is our job to protect consumers from potentially harmful insurance scams," said Jorge Gomez, Commissioner of Insurance. "But we are not always aware of companies posing as insurance companies on the Web."

Consumers need to carefully evaluate online offers that appear to be insurance. Many companies that promise cheap insurance are actually selling "discount plans." A discount plan is not insurance, but a plan where you pay a membership or enrollment fee up front to obtain access to networks of healthcare providers who have agreed to offer discounts for their services. Discount plans are not regulated by OCI.

To determine if an insurance plan is reputable and trustworthy, keep the following tips in mind:

• Find the name of the insurance company or companies involved in the plan. Be leery if there is no name, or if you don't recognize the name as a legitimate insurance company or agency.
• Licensed insurance companies will usually display their logo and name prominently.
• If you cannot find who the insurer is, call the company and ask what state they are licensed in.
• Check with OCI to see if the company is licensed or not in Wisconsin. OCI can be reached at 800-236-8517 or oci.wi.gov.
• Be careful when giving out your personal information. A licensed insurance company should give you information about their plan up front without requiring any personal information like credit card numbers.
• Make sure transactions which include personal data are only performed on pages that are "secure." To find out more about the definition of a "secure" Web page please see the article titled "Understanding Web Site Certificates (http://www.us-cert.gov/cas/tips/)."
• Be suspicious of plans that seem very inexpensive and too good to be true; they usually are.

But many legitimate insurance companies also have Web sites. Because of this, it is important for consumers to recognize when they are dealing with a real insurance agent, and when they are dealing with a discount plan.

"The bottom line is that consumers must be careful when shopping online for insurance," said Gomez. "Make sure to research the plan you're interested in, ask a lot of questions, and take your time in deciding which plan is best for you and your family."

Created by the Legislature in 1871, Wisconsin's Office of the Commissioner of Insurance (OCI) was vested with broad powers to ensure that the insurance industry responsibly and adequately met the insurance needs of Wisconsin citizens. OCI's continuing mission is to lead the way in informing and protecting the public and responding to its insurance needs.