Consumer Insurance Guide

The Mississippi Insurance Department And You

Whether you are making a decision to purchase insurance or dealing with an insurance claim, the Mississippi Insurance Department (MID) is here to provide as much information and assistance as we can.

The mission of the Consumer Services Division is to mediate and resolve conflicts between the insurance industry and the residents of Mississippi, to provide information to the public, and to assist consumers in all phases of their insurance business. We receive complaints from policyholders who feel they have not received fair consideration by insurance companies or agents, and attempt to take corrective action against such practices where appropriate. In 2012, for instance, MID’s Consumer Services Division handled an estimated 15,700 requests for assistance resulting in excess of $3.1 million being refunded to consumers.

Buying Insurance

The insurance marketplace is becoming more and more complex. Oftentimes, the consumer needs assistance in making a decision on which products to purchase for adequate coverage.

You can protect yourself from companies in bad financial shape by asking questions when you are shopping for insurance. Contact the MID to make sure that the company is licensed to do business in your state or use our Licensing Search Page. If it isn’t, don’t buy insurance from that company. If you purchase insurance coverage from companies not legally doing business in Mississippi, you will not be protected by the guaranty fund should the company fail.

Check the ratings issued by the different rating companies that conduct financial analyses of insurance companies and grade them. (MID is unable to recommend or provide ratings of individual companies.) Ratings issued by the various agencies are available at most public libraries. Our Insurance Company Rating Services Page lists major rating agencies, their internet links, and phone numbers. If you call, ask what you will be charged for rating information about a company.

How To File A Complaint

When a disagreement with an insurance company leads to the filing of a complaint, specific procedures must be followed in order to accurately and efficiently process your claim. Please see our File Complaint Page for instructions on how to file a complaint.

Consumer Tips

  • Contact the MID to order our free consumer guides or for help answering any questions that you may have. Please see the Request Assistance Page for information on how to contact us.
  • Know what you are buying. Read the policy and ask questions until you understand it fully. Ask your attorney or a trusted friend or relative to explain things.
  • Shop around and compare policies, prices, benefits and services. Contact the MID to verify that your agent and company are licensed in the state of Mississippi or use our Licensing Search Page.
  • Always get a binder from the agent after purchasing coverage. The binder should show the name of the agent and insurance company, lienholders (if any), policy effective date and time, and the coverage you purchased. It should also be signed by an agent. Your policy should be issued within 60 days of its effective date.
  • Know the name of your agent and the insurance company that insures you. They may be different from the name of the insurance agency or Third Party Administrator (TPA).
  • Always get a detailed receipt and never pay cash if it can be avoided. Try to pay insurance premiums by check or money order made out to the company or premium finance company.
  • Keep copies of all your insurance records. Store extra copies is a safe-deposit box or with a friend or attorney. Keep all copies of insurance policies (past and present) on financed items until the loan is satisfied and you have received your title or deed. It can be very hard to go back and find these records.
  • If you decide to change coverage or companies, make sure the new coverage is in effect before canceling the old policy.
  • Be aware that if you don’t maintain coverage on a financed car or mortgaged home, the financial institution will purchase insurance to protect its own interest. You will be charged for this very expensive coverage, which may not adequately cover your needs.
  • Protect your insurance identification card as if it were a credit card. People can commit insurance fraud with your account number.

Buyer Beware

Although the overwhelming majority of insurance agents and companies are reputable, there are a few unscrupulous operators. There are many forms of insurance fraud. Although no one is protected from fraud because of their race, sex or age, the elderly are common targets for insurance fraud. Protect yourself by verifying whether or not an agent or company is currently licensed in Mississippi. Insurance criminals often sound very helpful and considerate. They strike when people are the most vulnerable and their promotions are very enticing. If you feel that someone is offering you something that is too good to be true, report it to MID. Please see the Request Assistance Page for information on how to contact us.

Be sure to watch out for these fraud schemes:

  • Pocketing – Instead of turning an insurance policyholder’s premium payment in to the company, an agent simply “pockets” it and leaves the consumer without coverage.
  • Twisting – An agent persuades the life insurance policyholder to change policies after the first year that it is in effect, in order that he or she can continue to receive the highest commission rates that typically are paid during that first year.
  • Churning – An agent tries to sell an additional policy to a person who already has a life insurance policy with cash value. However, the cash value of the old policy is depleted to pay the premium of the new policy, requiring the policyholder to come up with money to pay for both policies, or allowing the coverage to lapse.
  • Sliding – An agent “slides” extra, more expensive coverage into a low-commission life insurance policy. The extra coverage typically includes high-cost accidental death, guaranteed renewable term or motor club membership.
  • Understatement of risk, or “cleansheeting” – An agent omits pertinent health information from a consumer’s health insurance application to make a sale which might not otherwise meet the insurance company’s risk-management requirements.
  • Fraud rings – An agent that is part of a fraud ring tries to restrict you to going to one particular doctor, auto repair shop, or attorney.

Getting Assistance From The Mississippi Insurance Department (MID)

If we can be of assistance, please see the Request Assistance Page for information on how to contact us.