Sep 09
23
Don’t become the victim of auto insurance fraud
Here are two common Auto Insurance sales scams:
# 1
An individual pretending to be a licensed auto insurance agent or broker offers to arrange auto insurance coverage at a rate much lower than what you’re currently paying or have been quoted. The individual charges you a fee for this service.
After getting information about your driving history, the individual impersonates you when calling a licensed insurance company for an auto insurance quote. The individual lies to the insurance company about your personal information or driving history to get a lower rate. For example, he or she will state that you belong to a group that qualifies for a discount or will fail to tell the insurance company about your accidents or traffic violations.
You pay your premium directly to the insurance company and receive a proof of insurance coverage.
The reality
- The individual you are dealing with is not a licensed insurance agent or broker. A licensed insurance agent or broker does not charge you fees — he or she receives payment from the insurance company.
- Your auto insurance coverage is invalid because the information provided to the insurance company is false.
# 2
An advertisement promises auto insurance coverage at rates much lower than what you’re currently paying, or offers free auto insurance coverage for a specified number of months.
When you call the phone number in the advertisement, you are provided with a quote. When you accept the quote, you are asked to send a partial or full payment for coverage through a transfer or money wiring service. In some cases, the individual you contacted will meet with you to accept a cash payment.
The reality
- Your auto insurance coverage is non-existent because it was never arranged. The individual you contacted pocketed your payment.
- The individual you contacted is not a licensed insurance agent or broker.
The Harsh Reality
Consumers sometimes realize they do not have valid auto insurance when they fail to receive a proof of insurance card (pink card).
Some consumers discover they do not have valid auto insurance under very serious circumstances, such as when they are stopped by the police and charged for driving without insurance, or when they become involved in an auto accident.
Remember, driving without valid auto insurance, even unwittingly, is illegal. It is your responsibility to ensure that you have valid auto insurance, purchased from a licensed agent, broker, or insurance company.
Here’s what you can do :
- Do not pay a referral fee – licensed agents and brokers do not charge you fees.
- Do not pay your auto insurance premium through a transfer or money wiring service – this is not a practice in the insurance industry.
- When applying for auto insurance, you must complete an application form called the Ontario Application for Automobile Insurance – Owner’s Form (OAF1). If an agent or broker completes the form on your behalf, check it for accuracy – by signing the contract, you are agreeing to the statements made to the insurance company.
- If you suspect fraudulent activity in the purchase of auto insurance, contact the police.
- Make sure the individual you are dealing with is legally allowed to sell auto insurance – check www.fsco.gov.on.ca (click Insurance Agents Licensed in Ontario in the Insurance area of the website) or www.ribo.com (click Consumer Information).
- Check that the insurance company you are dealing with is licensed. Go to www.fsco.gov.on.ca (click Licensing & Registration, Licensed Insurance Companies in Ontario).
Remember, if something sounds too good to be true, it probably is!
(found on the FSCO web site)
