South Dakota consumers warned of insurance fraud Knowing when to ask questions and who to ask can help South Dakota policyholders avoid being victims of insurance fraud, according to officials with the state Department of Revenue & Regulation, Division of Insurance. Insurance fraud occurs when an insurance company, agent, adjuster or consumer commits a deliberate deception in order to obtain an illegitimate gain. It can occur during the process of buying, using, selling, or underwriting insurance. Division of Insurance Director Merle Scheiber says while such action directly impacts the fraud victim, everyone who is insured can be affected. â�?�?When fraudulent claims are paid or the insurance company is defrauded, prices go up for everyone,â�? Scheiber said. â�?�?Reporting claim fraud is one thing consumers can do to help hold down those insurance costs.â�? According to Scheiber, insurance fraud can be committed either by the insurer or the insured. Common types of insurance fraud include: â�?¢ Fake insurance companies who defraud consumers by collecting premiums for bogus policies with no intention of paying claims. These â�?�?companiesâ�? might offer policies at costs that are significantly lower than competitorsâ�?�? prices. â�?¢ Unlicensed companies who lead consumers to think they are selling â�?�?insuranceâ�? when the product is not insurance but is made to look like insurance. If the plan involved is a discount medical plan that provides discounts on medical services or pharmaceuticals, make sure the plan is properly registered in South Dakota. A listing of registered discount medical plans can be found at www.state.sd.us/drr2/reg/insurance/companies/dmp.htm. â�?¢ Licensed insurance agents who deceive customers for personal gain. While most licensed agents do not engage in dishonest practices, some unscrupulous insurance agents might collect premiums from a customer without passing them along to the company. â�?¢ Deliberate attempts to stage an accident, injury, theft, arson or other type of loss that would be covered under an insurance policy; exaggerating a legitimate claim; and/or knowingly omitting or providing false information on an application for an insurance policy are all examples of consumer insurance fraud. Scheiber says if a policyholder does not receive their insurance card or a copy of their policy in a timely manner; have their policy cancelled or non-renewed for lack of payment when they have been making payments to their insurance agent; or have suspicions regarding a plan being offered to them, they should contact the South Dakota Division of Insurance. South Dakota maintains a fraud unit which investigates insurance fraud and takes referrals from a variety of sources, including consumer complaints. To report a suspected incident of insurance fraud, contact the South Dakota Division of Insurance at 605.773.6325 or by email at email@example.com.