What is Twisting in Insurance? Things to Know as a Consumer

Insurance agents have many different strategies for pushing sales onto their clients. Some tactics are questionable and dance around the line of fiduciary responsibility. Others are legal and can provide clients with more affordable rates and wider insurance coverage. However, some insurance agents get sell by insurance twisting. In this article, we will take a look at what insurance twisting is and how to look out for it if you’re a consumer.

What is Insurance Twisting?

Insurance twisting is the practice of trying to induce a policyholder to switch their insurance policy with a similar one from a competitor. The reason it is referred to as “twisting” is because insurance agents often use fear tactics and false information to get policyholders to make a switch.

Insurance agents are paid on a commission policy structure, so by nature, they are incentivized to get you to switch to their carrier. Through insurance twisting, agents can give consumers deceptive information about insurance policies to make a sale. This is considered coercion and can carry legal weight for agents.

Unsuspecting policyholders can make the switch with no underlying benefit or reduction in their rate. It occurs most often with life and health insurance policies because they can be more complex than other insurance policies like home and auto. However, it can also occur with home and auto insurance.

How to Spot Insurance Twisting

As a consumer, it’s important to have a solid understanding of what kind of insurance you are purchasing, the full cost, and what your policy covers. If you don’t fully understand the insurance policy an agent is trying to sell you, don’t buy it. Insurance agents have a legal fiduciary responsibility to help you find the best policy for your needs. Below are some ways to spot insurance twisting as a consumer:

  • Agents making extravagant claims about the policy or their expertise
  • Aggressive sales tactic to get you to switch
  • Failure to explain the full scope of policy coverage
  • Cold calling
  • Threats that you will lose insurance coverage

These are just some of the ways that insurance agents can twist you into switching your insurance. If you’re looking for a new insurance policy, it is highly recommended that you shop around to get a better idea of different rates and coverage options.

Examples of Insurance Twisting

As previously stated, insurance twisting is most common with life and health insurance policies. Let’s take a look at some examples of insurance twisting.

Life Insurance Twisting Example

Let’s assume that you have purchased a whole life insurance policy that has accumulated cash value over the life of the policy. Your life circumstances have changed and as a result, you can no longer afford the monthly premiums.

You decide to reach out to your life insurance agent to help you find a more affordable policy. The agent convinces you to cancel your current life insurance policy and purchase a much cheaper term policy. As a result of selling you a new policy, the agent will make a commission.

The new policy is cheaper and from a different carrier, however, the agent omits some important details. They fail to tell you that you could forfeit the accrued cash value in the whole life policy or pay taxes on it if you withdraw it. This can carry some serious financial implications for consumers.

A good agent will carefully explain what will happen if you cancel your whole life policy along with the tax implications. They won’t leave details out that could prevent you from canceling your policy, just to get a sale.

Example of Homeowners Insurance Twisting

Another insurance area where twisting can occur is with homeowners insurance policies. A common instance where twisting occurs with homeowner’s insurance is with agents getting you additional coverage when it isn’t needed.

The main pitch comes with homeowners insurance exclusions and coverage. An example of twisting in homeowners insurance can happen if you build a detached structure. Let’s assume that you recently built a detached garage. You decide to call your insurance agent to check and see if it’s covered under your existing policy. The agent says that it’s not covered and that you will need to purchase an additional insurance rider to cover the detached garage.

This is an example of homeowners insurance twisting. You may need to simply increase your current insurance coverage instead of having to purchase an additional rider. Additional riders tend to carry higher premiums and help agents earn a commission. It’s recommended that you carefully check your coverages and even consult another insurance agent for advice.

Example of Health Insurance Twisting

Health insurance is perhaps the most complicated insurance when it comes to coverages. Consumers can be swindled out of hundreds of dollars simply due to the complex nature of health insurance. If the company you work for doesn’t offer health insurance, you may have to get one from the public market.

If you have to search for health insurance on your own, it’s important that you fully understand your policy and coverages. In cases which an agent sold you a policy that didn’t cover pre-existing conditions, certain exams, or surgeries that you were expecting, that would be considered twisting.

Failure to disclose important information related to your health insurance policy is not only unethical but illegal.

Insurance Twisting vs. Churning

Now that you have an understanding of how insurance twisting works, it’s important to make the distinction from churning. Along with twisting, agents can churn clients to sell an insurance policy.

The practice of churning involves when an agent convinces you to purchase a new policy with the same company. The new policy doesn’t provide any benefits or savings, it simply helps the agent make a new sale. Agents oftentimes do this with existing clients to hit quarterly quotas or bonuses. Churning is an illegal insurance practice.

Protecting Yourself From Insurance Twisting

As a consumer, it’s important to have a solid understanding of the insurance products you purchase. They act as a significant protection against an unexpected loss. If an insurance policy is not written correctly, it can cost consumers hundreds of thousands of dollars.

As such, you must work with a reputable insurance agent who has your best interest. It’s also important you take the necessary time to shop around and get multiple opinions before you settle down with an agent.

Educating yourself on insurance products will also help you avoid being a victim of insurance twisting. Taking the necessary time to review your insurance policy and disclosure statements will also help you stay protected.

The Law On Insurance Twisting

Insurance is one of the most regulated industries around. If an agent engages in insurance twisting they can lose their license and face serious fines. The job of an insurance agent is to act to protect your financial well-being. This includes finding you an insurance policy that best suits your needs and budget.

Insurance agents need to provide you with a policy that either improves your price or existing coverage. They shouldn’t sell you a policy that doesn’t accomplish at least one of the two. Insurance agents also have a responsibility to make sure they provide you with all the necessary insurance disclosures. If you don’t understand your policy and coverages, your insurance agent has failed their job.

Insurance agents can’t lie, coerce, pressure, or misrepresent facts to sell an insurance policy. As such, twisting is considered illegal and can be grounds for license suspension.

What to Do If You’ve Been a Victim of Insurance Twisting

The National Association of Insurance Commissioners has protection in place to help consumers who think they may have been a victim of insurance twisting. Most reputable insurance agencies have strict policies that are meant to protect consumers when they switch insurance. These policies are in place to prevent practices like insurance twisting.

Some insurance carriers and agencies also have grace periods ranging from 30 to 60 days. During these grace periods, new policyholders can have time to cancel the policy and get their full premium back. These periods give consumers ample time to make changes if they need to. They also prevent pushy salespeople from trying to just get a sale.

If you feel like you have been a victim of insurance twisting, talk to another insurance agent and ask them to review your policy. They can give you an unbiased opinion and help you make the right decision.

Another more aggressive course of action is to report the insurance agency to the Department of Insurance and Financial Services in your state. They will review your policy and give you a professional opinion. If the agency or agent is found guilty, they could face fines and lose their insurance licenses.


As you can see, it’s important to stay educated and informed as a consumer when it comes to insurance. Majority of insurance agents are there to help you find the best coverage for the best rate and ill usually have your best interest at heart.

However, be patient and shop around and make sure to you fully understand your policy coverages. Insurance isn’t a product that you should rush into. It’s meant to serve as protection in the event of an unexpected loss. So, take the necessary time to understand and find a policy that suits you needs.