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  • Dean Smith

COVID-19 Insurance Scams: the Plague within the Plague

Nothing brings out fraudsters like times of crisis and upheaval, and the current civil unrest and spread of COVID-19 is a perfect breeding ground for bad actors. Unsurprisingly, many of the latest scams prey on consumers’ fears and anxieties tied to COVID-19, and watchdogs throughout the United States have raised numerous warning flags. While much of the country’s activity has ground to a halt as quarantine measures took effect, insurance fraud monitors remained vigilant, and over the past few weeks they’ve issued a host of consumer alerts, particularly about scams with a unique COVID-19 twist.

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According to various members of the fraud-fighting community, the new indicators of fraud were difficult to predict as COVID-19 spread. The crisis was without precedent in recent history and our contemporary society is radically different, particularly with respect to technology, than it was in 1919. Some scams were relatively easy to forecast. Investigators urged consumers to be be on the lookout for fraudulent robocalls, phishing, and spam mailings with a COVID-19 spin almost immediately.

James Schweitzer, Senior Vice President and Chief Operating Officer at the National Insurance Crime Bureau (NICB), offered common-sense advice within days, saying, “Really, if it sounds too good to be true, it probably is,” and “So many of these internet scams and social media posts are appealing to this anxiety level that we’re all dealing with.” Schweitzer added that scammers are appealing to an individual’s desire for information — data that makes them feel good or provide a sense of hope. In turn, the fraudster preys on their desire to help, hoping to score a credit card number, social security number, or any other type of personal information that may aid them in gaining access to your finances.

Organizations including the NICB, the Coalition Against Insurance Fraud and the Federal Trade Commission (FTC) have warned about several types of COVID-19-related scams. Here are a few to know about.

Bogus Insurance Agents

People claiming to be licensed agents and mimic legitimate, mainstream insurance companies in their pitches to sell COVID-19 insurance. Jim Quiggle, Senior Director of Communications for the Coalition Against Insurance Fraud, urges consumers not to click on any links or speak with a caller who’s pitching an insurance product that claims to cover COVID-19 related problems. “Do not engage,” says Quiggle. “These are trained pitchmen who have a response for every objection you can imagine. They are so smooth. Just hang up the phone.”


Unsolicited emails that request personal information with a COVID-19 twist. The Federal Bureau of Investigation has urged consumers to avoid filling out any forms in an email that requests personal information and not to click on links, and warned that people should be on the lookout for emails from companies that claim to have access to COVID-19 testing kits, masks, ventilators, insurance and cures.


This is one of the most popular, and rather successful, frauds garnering attention from authorities. Scammers are falsely claiming to be from legitimate well-known insurance companies and asking you to call a toll-free number where someone on the other end may try to sell you COVID-19 health insurance coverage.

The FTC has warned that robocall scammers are also pretending to be from the Social Security Administration, offering fake COVID-19 tests to Medicare recipients, and running small business listing scams. The Federal Communications Commission has also provided audio samples of COVID-19 scams, and you can listen to a sample of illegal robocalls collected by the FTC here.

Almost Anything Involving the World Health Organization

The World Health Organization (WHO) has warned criminals are disguising themselves as WHO officials to steal money and sensitive information. WHO has said its only call for donations has been the COVID-19 Solidarity Response Fund, and added that their representative will:

  1. Never ask you for a user name or password to access safety information.

  2. Never email you attachments you didn’t request.

  3. Never ask you to visit a link outside of

  4. Never charge you money to apply for a job, register for a conference or reserve a hotel.

  5. Never conduct lotteries.

  6. Never offer prizes, grants, certificates or funding through email.

COVID-19 Car Insurance Scams

Fraud investigators warn that scammers will run their old playbooks of fraud schemes, but also take advantage of COVID-19 fears, like social distancing and fear of infection.

Staged Accidents

Generally defined as an event where someone purposely causes an accident in order to make a claim against your car insurance or their own. Intentionally rear-ending or sideswiping another car are common schemes. Staged accidents are often committed by organized fraud rings.

With much of the country practicing social distancing, fewer cars on the road and fewer witnesses, scammers have an opportunity. Investigators say scammers will use the fear of spreading COVID-19 as an excuse to discourage police involvement, leaving an opening to file false insurance claims.


This scam is when people who were not in the car at the time of the “accident” file injury claims. They hope to get a settlement from another driver’s liability car insurance. The COVID-19 spin is similar to the staged accident spin. Scammers might take advantage of others’ anxieties and suggest a limited exchange of information, such as passenger names. With no police report and no witnesses, they have an opportunity to make false injury claims for people who were not in the car.

If you get into a car accident, try to note how many people were in each car and, if possible, their names and contact information. You should still practice social distancing. You can also call the police and wait in your car.

Auto Repair Fraud

This fraud is when a repair shop takes advantage of both you and your insurance company. Fraud investigators report that some repair shops are charging excessive fees for cleansing, disinfecting and storing vehicles, claiming they cannot work on vehicles for several days because of possible COVID-19 infection.

Be suspicious of auto repair shops that charge high out-of-pocket fees for cleaning and storing your car. Speak with your insurance adjuster before paying any up-front out-of-pocket costs.

COVID-19 Travel Insurance Scams

The Coalition Against Insurance Fraud is urging consumers to be wary of pitches for bogus travel insurance policies that claim to cover COVID-19-related trip cancellations. Most travel insurance policies do not cover pandemics. If someone pitches you travel insurance that specifically covers COVID-19-related problems, that should raise a red flag.

You might hear the term “cancel for any reason” (CFAR) coverage in a sales pitch. This is a legitimate coverage type sold by travel insurance companies, but it’s sold as an add-on to a base policy. CFAR coverage is not sold as a stand-alone insurance policy. And in legitimate policies there are usually strict limitations on when you can buy CFAR and how you can use it.

  1. You typically have to purchase CFAR within 14 to 21 days of your initial trip payment. For example, if you made your first trip payment in early March, you can’t add CFAR in April.

  2. CFAR coverage typically adds 40% to the cost of your base travel insurance policy. If someone offers free CFAR coverage, that should raise a red flag.

  3. You typically have to cancel the trip within a certain time frame of your departure. Some travel insurance companies require 48 hours before departure to use CFAR coverage.

  4. You do not get reimbursed for 100% of your lost trip expenses. Most CFAR policies reimburse between 50% to 75% of your prepaid, nonrefundable trip costs.

  5. The rules for CFAR coverage vary depending on the travel insurance company, but any sales pitch that strays beyond these general guidelines should raise a red flag. It’s a good idea to be extra vigilant, and if you have any questions about CFAR coverage, contact the travel insurance company directly to make sure it is a legitimate offer.

Some legitimate travel insurance companies have extended coverage that would typically be excluded (such as trip cancellation because of a pandemic) to travelers affected by the COVID-19 outbreak, according to Kasara Barto, a spokesperson for, a travel insurance comparison website.

“Even though the coronavirus outbreak is not a covered event under a standard policy, we’ve seen providers making exceptions and refunding policy premiums if a trip was canceled and refunded by the travel supplier,” says Barto.

The bottom line is to be aware of scammers impersonating legitimate services, anyone unknown to you who is asking for personal information, or anything out of the ordinary involving COVID-19 that pulls at your heartstrings. You may be a decent person, but there’s a world full of bad actors hoping to take advantage of financial anxieties and social fears.

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