Ah, insurance—everyone’s favorite topic to feel warm and fuzzy inside. People hate insurance because it’s expensive and a mess to deal with when you need it. However, the nightmare doesn’t stop there. From flat-out scams to shady practices from legitimate companies, fraudulent acts in the insurance industry are fairly common. These bad actors can take advantage of your need for coverage, costing you precious money in the process. Learn to be smart with finances in this area—here’s how to identify an insurance scam.

Recognize the Red Flags

The following red flags should be your first indications that something is awry.

Unsolicited Offers

If a company approaches you out of the blue, especially through phone calls or emails, it should raise suspicion. Reputable insurers usually wait for customers to initiate contact.

Aggressive Sales Tactics

Scammers push for immediate decisions, using high-pressure techniques to make you act quickly. Always, always wait to make a decision until you ask enough questions and do enough research.

Unusually Low Premiums

If it’s too good to be true, it probably is—this old saying rings especially true with insurance. If you’re getting offered bundled home and auto insurance for $50 a month, no, you’re not. You’re getting offered the chance to pay someone $50 a month in exchange for nothing.

Information Discrepancies

Finally, be cautious of discrepancies in documentation. If the paperwork seems vague or provides uncertain terms, take it as a warning.

Research the Company

If you noticed any red flags, your next step should be to dive deeper. One of the top mistakes to avoid with home insurance—and any insurance, for that matter—is not doing your research. You must verify the provider’s credentials and reputation.

Consult resources like the Better Business Bureau or your state’s insurance department to check for complaints or disciplinary actions against the company. Look for online reviews, but remain cautious, as scammers may post fake positive reviews. A company that cannot provide verifiable information, such as a physical address or contact details, should also raise your alarm.

Trust Your Instincts

Lastly, never underestimate your intuition when assessing insurance offers. If something feels off, take a step back. You’re not going to hurt anyone’s feelings or miss out on a great deal. Trust your judgment and consult with trusted friends or financial advisors before making decisions.

By following these guidelines for identifying an insurance scam, you can practice smart finances and protect your financial health.

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