The National Association of Insurance Commissioners (NAIC) has issued a warning advising consumers not to purchase health insurance before checking out their insurers.

Why? Because phony insurance companies selling phony coverage are taking some unsuspecting health insurance shoppers to the cleaners—to the tune of more than a quarter of a billion dollars.

Today's story in Yahoo! News reports that Insurance fraud is a growing problem these days, and one that is difficult to track. Because insurance watchdogs like the NAIC are set up to monitor licensed providers, "fake" unlicensed insurance carriers often fly under the radar, imperceptible to those affected most—those consumers who mistakenly buy their products with no clue they're getting ripped off.

The result? Buyers who think they're insured file a health claim, only to discover they really have no coverage. Many end up in debt, bankruptcy and total financial distress because they can't pay their medical bills.

If you're shopping for health insurance, take it from me and do yourself a favor: call or log on to your state insurance department and confirm the legitimacy of any company you're considering doing business with. You'll save yourself a lot of time, expense—and heartache.