Insurance Company Scam

Gwen Carter had health insurance through her husband's employer, but she started getting suspicious about it after she got sick.



Carter had multiple sclerosis. Her medical bills began piling up because her insurance company made only one payment.



"That set another stress mark over and above what I needed at the time," she said.



It's one of the biggest insurance scams out there -- unlicensed companies selling insurance. You pay your premiums, but they refuse to pay most of your claims.



North Carolina's Department of Insurance has issued Cease and Desist orders against seven different health insurance companies, including American Heartland Health Administrators and Benefit Plans of America.



A government investigation finds more than 200,000 consumers have some $252 million in unpaid claims.



Alice Molasky-Arman is with the National Association of Insurance Commissioners. She said the problem of phony insurance companies is growing.



"The people who perpetuate these plans are predators," she said. "The policies themselves are counterfeit. They look like, they sound like an ordinary insurance contract."



Right now, the Department of Labor has more than 100 open investigations across the country.



James Quiggle, with the Coalition Against Insurance Fraud, said consumers have to be smart as well.



"Consumers will have to be very careful when they're offered a deal that seems too good to be true," he said.



Carter said she wishes she had checked on her insurance company before she really needed it.



"The old adage is, 'Don't assume.' Because when you assume, that's when you run into problems," she said.



There's a very simple way to find out if an insurance company is licensed or not. You can call the North Carolina Department of Insurance at 1-800-546-5664.