You may be the victim of a form of auto insurance fraud called ‘insurance sliding,’ which is prohibited by law, according to recent DIFS bulletin
Do you ever look at your Michigan No Fault auto insurance bill and wonder what some of the charges are for and how they found their way onto your bill?
If you have, then you’re not alone.
What I’m about to describe below, which is called “insurance sliding” is probably the thing I get the second-most number of frustrated calls about when people are upset about auto insurance. As an aside, the thing that gets people most upset is when people are involved in a car accident that isn’t even their fault, and they still get their rates jacked up. They could be completely innocent, get rear-ended by a distracted driver, and still see a spike in auto insurance. This goes for small insurance claims, too.
Insurance sliding is different. Insurance sliding is a form of auto insurance fraud which involves an auto insurance consumer being charged for coverage and/or services without the consumer ever knowing he or she would be charged.
In Bulletin 2015-21-INS (“In the matter of Insurance Sliding”), which was issued on September 23, 2015, Patrick M. McPharlin, Director of the Michigan Department of Insurance and Financial Services explained:
“It has come to the Director’s attention that some insurance producers are engaging in the practice known as insurance ‘sliding.’”
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“‘Sliding’ is defined as an agent’s failure to fully disclose all the details of, and obtain informed consent to, the purchase of all products and services being included in an insurance transaction.”
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“Often the charges attributable to the additional coverages are hidden in the total premium charged to the customer and result in a much higher premium than that to which the customer agreed.”
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DIFS Director McPharlin also stated quite clearly that the “practice known as insurance ‘sliding’” “is in violation of the Michigan Insurance Code,” which prohibits auto insurance companies and insurance agents from:
“Using fraudulent, coercive, or dishonest practices or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this state or elsewhere.” (MCL 500.1239(1)(h))
As an auto accident lawyer, I’ve devoted my career to helping people after serious car and truck accidents. I fully support this DIFS Bulletin, condemning the form of auto insurance fraud known as “insurance sliding.” Imagine buying a car, and after you agreed to a price with a car salesman, you find out you’ve been charged for a whole bunch of other things that were never disclosed.
At a time when the cost of auto insurance is not far from most drivers’ minds, it is welcome news to hear and see that Michigan’s Insurance Commissioner is taking a strong stand to help protect auto insurance consumers from fraud and price-gouging by Michigan No Fault auto insurers.
Beware: What does ‘insurance sliding’ look like?
Below are some examples from the DIFS Bulletin of “insurance sliding” (which “will give rise to sanctions” under the Insurance Code for offending auto insurers and agents):
- Representing to an applicant that a roadside assistance product is required for the purchase of automobile insurance, when it is not;
- Representing to an applicant that any ancillary coverage or product is required in conjunction with the purchase of insurance when such coverage or product is not required;
- Enticing customers into signing up for insurance coverage without fully explaining all coverages included and the cost for each;
- Representing to an applicant that an ancillary coverage, service or product is included as part of an insurance product or without additional charge, when it is not or when such charge is in fact required;
- Failing to accurately disclose the cost of insurance as charged by the insurer;
- Charging an applicant for an ancillary coverage or product, in addition to the cost of the insurance coverage being applied for, without the informed consent of the applicant.