How to Spot a Fake Certificate of Insurance?

Insurance Quality

The levels of risk for COI holders are steadily increasing.  In fact according to this website, in just the last three years:

  • A contractor in New Jersey received a one-year jail term for filing a false COI.
  • In California, an insurance agent issuing phony COIs was arrested.
  • A roofer in Pennsylvania was sentenced to two-year’s probation, fined for $5,000 and made to perform 75 hours of community service for issuing a false COI.
  • An insurance broker in Michigan was jailed and fined $20,000 for selling fake certificates of insurance. (Hayes Insurance, 2015)

According to recent reports, the biggest issue faced by Certificate of Insurance holders is misrepresenting coverage on a COI. Questionable COIs make the need for vigilance through the entire chain of COI processing more crucial than ever.

Here are three ways you can make sure that you decrease your risk of processing a fraudulent COI:

How to Spot a Fake Certificate of Insurance?

Even the most trust-worthy business can sometimes pass off a fake certificate. Make sure to identify the following on your COIs:

Acord 25

The most trustworthy insurance agencies utilize the Acord 25 form. Check the bottom left-hand corner of the COI to ensure that the certificate says “Acord 25”.

Legitimate companies.

Always verify the insurance company on the certificate. Either contact your insurance agent to request confirmation or visit a site like Ambest.com to look up the insurance company in question. If neither confirms the existence of the insurance company – it is likely fraud.

Handwriting/mismatching fonts.

Examine the policy’s effective and expiration dates and description of operations section. Make sure the information is aligned properly and typed in uniform font. If you notice any handwritten dates or font that does not match the rest on the form, it could be fraudulent.

Generic forms.

Multiple sites on the internet hold fake COI documents that people attempt to pass off as valid. Look for a rectangle in the bottom right corner that is blank or says “CLEAR ALL.” If you see it, the COI was created via a PDF filler application or another tool – likely a fraud.

Lack of response.

Call the insurance company listed on the form to verify the certificate’s accuracy. Red Flag: The agents are uncomfortable responding to your request for verification or they deny that the contractor in question is their insured.  (SIMA, 2014)

Fix the Problem – Fast!

Any issues with a COI must be remedied before any work is started by a subcontractor. Once any work starts, all accidents associated will be covered by the faulty or fraudulent insurance. To avoid a lawsuit, make sure your personnel are trained to collect and review COIs and endorsements right away. Administrators should be looking for accuracy and any signs of potential fraud.

Implement a COI Tracking Solution

COI Tracking software can be a lifesaver for organizations who consistently process COIs. COI tracking software prevents the filling of data on the COI inaccurately – saving countless hours of manual labor and reducing the risk of human error.

If you are considering a COI tracking solution – JDi Data’s CTrax is the ideal tool. CTrax works in steps- from filing all the way to auto-renewal alerts. Verifying all the document information, CTrax will alert the user if any data is deemed erroneous and a request to change the information will be initiated. To learn more, make sure to scheduler a demo by clicking below.

CTrax offers 24/7 Support to their users, even during holidays.

Schedule CTrax Demo!

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