My client Karen called me last Tuesday in a panic. "Marcus, I just got a call from my insurance company saying my policy was cancelled and I needed to pay $1,200 immediately to reinstate it. They had my policy number, my address, everything. I paid them. Was that right?"
My stomach dropped. "Karen, what number did they call from?"
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She gave me a number I didn't recognize. I called her actual insurance company. Her policy was fine. Never cancelled. No payment due. Karen had just sent $1,200 to a scammer.
Insurance scam calls are exploding right now. The FBI estimates that insurance fraud costs Americans $40 billion a year. Scammers are getting sophisticated. They use spoofed numbers that look like they're from your insurance company. They have your personal information — sometimes bought from data breaches, sometimes scraped from social media. They sound professional. They create urgency. And they steal thousands of dollars before you realize what happened.
Karen was lucky in one way: she called me after paying, not before. Most victims never realize they were scammed until they try to file a claim and discover their policy was never cancelled because it was never in jeopardy. By then, the money is gone and the scammers have moved on to the next victim.
I spent the next day helping Karen file a police report, contact her bank to try to reverse the wire transfer, and report the scam to the FTC. The bank said they'd try but couldn't guarantee recovery. The police said they'd file a report but these cases rarely get solved. The FTC took the information and added it to a database. Karen got her $1,200 back — eventually, after 3 weeks of bank investigation. But she was stressed, embarrassed, and now questions every phone call.
Here's what I tell everyone now: your insurance company will never call you and demand immediate payment over the phone. Never. They send letters. They send emails. They give you 30 days to pay. If someone calls and says "pay now or your policy is cancelled," it's a scam. Hang up. Call the number on your insurance card — the real number, not the one the caller gave you — and verify.
Another common scam: the "claim adjuster" who shows up after a storm. They knock on your door, say they're from your insurance company, and offer to "inspect the damage" right then. They might even climb on your roof, take photos, and hand you a "preliminary estimate." Then they ask for your deductible upfront so they can "start the work." Once they have your money, they disappear. Your roof never gets fixed. Your insurance company has no record of them.
I saw this after the 2023 hailstorm in Colorado Springs. A guy in a truck with a magnetic sign showed up at my neighbor's house. Said he was from "State Farm Catastrophe Services." My neighbor gave him a $2,500 check for the deductible. The guy left, never came back, and the phone number on his card went to voicemail. State Farm had no record of him. My neighbor was out $2,500 and still had a damaged roof.
Here's how to spot these scams:
First, verify identity. If someone calls claiming to be from your insurance company, hang up and call the number on your policy card. If someone shows up at your door, ask for ID, then call your insurance company to verify they're legitimate. Real adjusters carry company ID and won't mind you checking.
Second, never pay upfront. Insurance companies don't ask for your deductible before work begins. The deductible is paid to the contractor when the work is done, or it's deducted from your claim payout. Anyone asking for payment before work starts is a scammer.
Third, be suspicious of urgency. Scammers create pressure: "You need to pay in the next hour or your policy is cancelled." "This estimate is only good for today." Real insurance processes don't work that way. You have time to verify, think, and decide.
Fourth, check the email address. Scammers send emails from addresses that look almost right: "claims@statefarm-insurance.com" instead of "claims@statefarm.com." One extra word, one hyphen, one different domain. Always verify the exact email domain with your insurance company.
Fifth, don't trust caller ID. Scammers can spoof numbers. I've seen calls that showed up as "Geico Insurance" on caller ID that were actually from overseas call centers. The technology to fake caller ID is cheap and widely available.
I now send a "scam warning" email to every new client. I tell them exactly what to expect from real insurance communications and what to watch out for. Karen wishes she'd gotten that email a week earlier. So do I.
— Marcus, Denver
