California Insurance Commissioner Campaigns Against Fraud

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California State Insurance Commissioner John Garamendi has launched a statewide campaign to warn consumers about scams involving fake insurance
policies.

The Department of Insurance has cracked several fraud cases in the past few months that have cost Northern California businesses millions of dollars, according to Garamendi. In two recent cases, businesses paid brokers for nonexistent coverage, exposing their companies to financial risk if claims had been made against them.

For example, in July, a former Antioch insurance broker was sentenced to three years in jail and ordered to pay $1.3 million in restitution after pleading guilty to grand theft charges. Mark Jerome Gentry, 39, admitted selling fake construction performance bonds to construction companies, he said.

Also that month, Richard Peterson, 65, of San Francisco, pleaded guilty to fraud charges for selling $4 million in fake liability insurance to restaurants, bars and taverns.

Consumers should be cautious before buying business, vehicle, health or life insurance, Garamendi said. He recommended consumers call the Department of Insurance to check out the agent and the company selling the policies.

“My advice is simple: Read your policies, don’t sign anything you don’t understand, never pay cash and, most importantly, check out your agent and his company with the Department of Insurance,” he said.

Garamendi plans stops in San Francisco, Los Angeles, San Diego and several Central Valley cities to promote the public awareness campaign, which was launched in late September.

‘My advice is simple: Read your policies, don’t sign anything you don’t understand, never pay cash and, most importantly, check out your agent …’