What Is State of Insurance?
Posted in Insurance on October 1, 2019
If you carry any type of insurance policy, from auto insurance to life insurance, you need to know about your state’s department of insurance. Every state has a department of insurance to protect policyholders from bad faith practices, fraud and misinformation. Rather than trusting an online search with your important insurance-related questions, go to your state’s department of insurance for reliable answers. If it has a website, you may want to bookmark it for future reference. Your state’s department of insurance is an important resource as a policyholder.
What Does State of Insurance Mean?
State of insurance refers to the state’s insurance department. In Florida, it is the Florida Office of Insurance Regulation (FLOIR). The department of insurance in each state helps consumers, civilians and policyholders. It does not work for an insurance corporation, but instead serves the best interests of the consumer. State of insurance describes the state’s efforts to regulate the industry, prosecute insurance fraud and spread awareness about insurance to consumers. State departments of insurance oversee all types of insurance plans, including automobile, health, life, homeowners and renters insurance.
What Does the State Department of Insurance Do?
The main task of any state department of insurance is to regulate this industry at the state level. The department’s main goal will be to protect consumers from issues such as dishonest insurance providers, unfairly high rates and insurance fraud. State departments, including FLOIR, can carry out several tasks to protect consumers and policyholders in the insurance industry. Each state department is unique in the exact policies and protocols it follows.
- Answers key questions to educate consumers
- Provides guidance during insurance claims
- Licenses insurance companies and agents
- Regulates insurance rates and policy language
- Monitors statewide industry markets
- Reviews insurance company practices
- Enforces the state’s insurance statutes
- Responds to consumer insurance complaints
In Florida, the state of insurance offers tools such as rate comparisons, company searches and research resources to help consumers educate themselves. It also has industry data, statistical reports and a database of past insurance claims filed within the state. You can register to receive notifications from FLOIR about insurance news that may concern you. You can also visit FLOIR’s website for general information about your insurance company or coverage.
Why Do States Regulate Insurance?
Florida and other states regulate insurance for the good of the public. Insurance companies are powerful corporations with a great deal of money and resources. They can easily overpower consumers and engage in unethical business practices at the expense of policyholders. Unfortunately, this occurs at many insurance companies that try to save money by undermining consumer rights and handling claims in bad faith. States rely on departments of insurance to enforce industry laws and protect the best interests of consumers.
Hold Bad Faith Businesses Accountable
One of the key tasks at a state department of insurance is to take action against insurance providers that may be engaging in bad faith business practices. These insurance carriers may face penalties and civil lawsuits for handling claims in bad faith. Examples of bad faith insurance include an insurance company denying a valid damage claim, delaying a claimant’s payout without reason, asking for an excessive amount of proof, waiting too long to respond to a claim or refusing to offer a reasonable settlement amount. FLOIR can fight against bad faith with remedies such as investigating an insurance company and tracking past infractions.
Prevent and Stop Fraud
Another important reason for states to regulate insurance is to prevent and stop fraud. Insurance fraud is a significant crime that costs the U.S. billions of dollars each year. Filing false claims, exaggerating valid claims, faking someone’s death, misrepresenting information or paying physicians for insurance kickbacks all constitute as insurance fraud. Insurance fraud can occur on the insurer or the policyholder’s side. Either way, state insurance departments can investigate alleged fraud, prosecute offenders and help prevent future such incidents. FLOIR and other states’ insurance departments serve to protect policyholders like you.