How Tom Hanks Got Scammed By An Insurance Broker

The actor nominated as “the most likeable person in Hollywood” has been scammed out of hundreds of thousands of dollars by an insurance broker. Jerry Goldman of Thousand Oaks (a Los Angeles suburb) charged Hanks (and many others) up to an inflated 600% increase in insurance premiums. A federal court has sentenced him to 27 months in prison for mail fraud and directed him to pay $840,000 in restitution.

How did Goldman Manage to Con People Out of So Much Money?

Simple – The majority of insurance purchasers have no idea what a reasonable premium looks like. It doesn’t seem to matter how wealthy, powerful, or popular someone is. We are all at the mercy of insurance companies, their agents, and brokers – even Tom Hanks.

When in Doubt, You Should Still Go with a Broker

Typically, a broker is an excellent and (mostly) unbiased source of information. Brokers, unlike agents, do not work directly for insurance companies. Brokers are paid only when you purchase a policy from them, so they are motived to make sure you are satisfied with your purchase.

However, be careful. Brokers are not completely independent. They derive the majority of their income from a percentage of your premiums (a commission). Therefore, while a broker can be a trusted advisor, you still need to be cautious and choose a broker who takes the time to answer all your questions. If you don’t feel like the broker is listening to you and carefully considering your insurance needs, but merely pressuring you to buy a product he likes – find another broker. And as Tom Hanks will surely tell you, pay attention to any large increase in premiums.

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Related articles

• Tom Hanks’ Insurance Broker Sentenced To Federal Prison For Scamming Star (huffingtonpost.com)
• California Insurance Broker Sentenced For Scamming Tom Hanks (insurancejournal.com)