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Anyone promising to sell you insurance that cannot provide a license
in the state you are purchasing it in, is a flat out scam! If you get involved in such a scheme, it's only a matter of time. You will get burned!
It’s a safe bet that most watersports and marine rental operators have been tempted to
sign up with unlicensed insurance-like companies to avoid the high cost and
restrictions. So this message is directed at those of you who think
you have everything to gain and nothing to loose.
The effects of condoning cheap insurance through unlicensed
insurance-like companies in this volatile market undermines the legitimate
insurance industry and may discouraged future coverage at any price.
So before you consider purchasing insurance, ponder these insurance tips:
1. Under the law both the "company" and the
"agent" selling insurance in the US must be
licensed. So if one has it, and the other one doesn't, that's should
be a
red flag!
3. Look out for "Management Companies" promoting insurance
programs through association membership, this an unlawful strategy that used
to circumvent the licensing requirements and delay prosecution.
4. Look out for statements like ("we have paid thousands in
claims"). The amount or totals have no relevance.
They may be able to pay $10,000 or even a $200,000 our of collected
premiums, however,
both the agent and insurance company must be licensed under the law and have
capital and surplus that meet with State requirements and
support their book of business.
5. Don't be afraid to ask for details about the insurance company such
as ratings, principal place of business, independent contact person within
the organization, banking relations and financial
stability.
6. If you have listed anyone as additionally insured under an
offshore
insurance-like company, you have an obligation to make them aware of the risk and additional exposure associated with
your actions.
Finally,
for those responsible operators offering parasailing, jet ski, boat
rental, watersking, diving, fishing and other water recreation toys
or services and have purchased insurance through licensed agencies and
would to report those who have not, you can contact the
Department of
Insurance.
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