While it is rare for a home insurance agent to run shady/illegal deals, it is not unheard of. Also please keep in mind that laws and regulations can vary dramatically depending upon where you live. Here are some examples of things that may be illegal (or possibly SHOULD be illegal) for home insurance agents to do where you live:
Misrepresenting policy terms: Home insurance agents are generally prohibited from misrepresenting the terms, coverage, benefits, or conditions of an insurance policy. They should provide accurate and truthful information to policyholders.
Engaging in unfair or deceptive practices: Agents should not engage in unfair or deceptive practices, such as withholding important information, providing false or misleading statements, or using fraudulent tactics to sell insurance policies.
Discrimination: It is typically illegal for insurance agents to discriminate against individuals based on protected characteristics such as race, gender, religion, nationality, or disability when underwriting or issuing insurance policies.
Twisting or churning policies: Agents should not engage in "twisting" or "churning" practices, which involve coercing or persuading policyholders to cancel their existing policies and purchase new ones unnecessarily. This practice is often done to generate additional commissions for the agent.
Unauthorized use of policyholder funds: Agents are prohibited from using policyholder funds for personal or unauthorized purposes. They should handle premiums and other funds in accordance with applicable laws and regulations.
Falsifying documents: Agents should not forge or alter insurance documents, policy applications, endorsements, or other relevant paperwork. This includes manipulating information to obtain better rates or coverage.
Failure to disclose conflicts of interest: Agents should disclose any potential conflicts of interest that may influence their recommendations or actions. They should act in the best interests of the policyholder and avoid personal gain at the policyholder's expense.
Violating privacy laws: Agents should adhere to privacy laws and regulations regarding the collection, storage, and use of personal information of policyholders. Sharing or selling policyholder information without consent may be illegal.
Failure to obtain proper licensing: Insurance agents must typically obtain the required licenses to sell insurance in their jurisdiction. Engaging in insurance activities without the necessary licenses is illegal.
It's important to note that specific laws and regulations can vary, so it's recommended to consult the laws and regulations in your jurisdiction or seek legal advice for accurate and up-to-date information if you encounter a home insurance agent that you suspect is doing something shady.