Indiana health insurers are not unlike other health insurers across the nation: They have dramatically raised their premiums in the last year. The result? A plague of unlicensed health insurers has cropped up, preying on consumers' pocketbooks and saddling them with unpaid claims.

"It's not just the Mom and Pop companies," says Thomas. "It's sophisticated companies with attorneys on staff. People really must perform due diligence. They aren't checking out these companies before they buy policies."

According to Thomas, the weakened economy has caused many more people to drop their individual health insurance policies because they can't afford them. If an insurance company appears to offer them coverage at lower rates than what they'd get by joining the state's "high risk" pool (see High-risk health insurance pools), they often snap up the policies before they know what they're buying.

"It can make you feel panicked if you think you don't have coverage, and it can be a relief to think you may be able to get a less expensive policy," says Thomas. "But you shouldn't buy it before investigating."

Thomas says you must call your state department of insurance to confirm whether your health insurer is licensed before you purchase a policy. To find the contact information for your department of insurance, select the state in which you live from the pull-down menu marked "Insurance in your state" at the top of this page. For more information about fraudulent insurance companies, see How to spot an unlicensed insurer.