What is coercion in insurance?

Coercion in insurance refers to the act of using force, threats, or intimidation to compel someone to purchase an insurance policy or to force an insured individual to accept a settlement offer from an insurance company. This unethical practice is illegal and goes against the principles of fair dealing and good faith in insurance.

Coercion can take various forms, such as making false statements about the consequences of not purchasing insurance, using fear tactics to convince someone to buy unnecessary coverage, or pressuring a policyholder to settle a claim for less than the amount they are entitled to receive.

Insurance regulators and consumer protection agencies have strict rules and regulations in place to prevent and punish coercion in the insurance industry. If an individual feels that they have been coerced by an insurance agent or company, they can file a complaint with the appropriate regulatory body and seek legal recourse to protect their rights and interests.