Most car owners want to pay the minimal amount possible for their auto insurance. However, sometimes when an offer seems good to be true, it really is. It’s an unfortunate fact that every year scores of Canadians are scammed by criminals posing as insurance agents or brokers. Here’s what you need to know and how you can avoid being targeted.
One way criminals defraud people shopping for auto insurance is by luring them in with fake advertisements for cheap insurance. They do this through ads that resemble ones made by real insurance companies. These ads can appear online as well as in community newspapers and flyers, often alongside legitimate advertisements.
In scams of this kind, the criminal simply takes your money and leaves you either without insurance or with a fake proof of insurance. In the latter case, if you get behind the wheel, you’ll be breaking the law: driving without valid auto insurance is illegal, even when it’s done unknowingly.
You can also get defrauded by criminals acting as insurance brokers. These unlicensed, dishonest individuals offer to get you lower rates and follow through on this claim by defrauding an insurance company. They accomplish this by misrepresenting your driving history.
Although you pay your insurance premium directly to the insurer and receive a proof of insurance coverage, your coverage is in fact invalid since the information provided to the insurance company was false. In these types of schemes, the criminal makes money by charging a “brokerage fee” up-front.
Tips for avoiding scams
Here are some things you can do to avoid being a victim of insurance scams:
- Only work with licensed insurance providers and insurance brokers. You can find out if a company or individual agent is licensed in Alberta by searching the Alberta Insurance Council’s online database.
- Never agree to pay a referral fee. Licensed agents and brokers don’t charge fees.
- Don’t purchase an auto insurance policy by wiring money or through an online transfer. This isn’t standard practice in the insurance industry.
- Carefully read everything you sign and ensure that the information you provide is accurate.
- If you suspect any criminal activity when buying auto insurance, report it to the police right away.
Dependable car insurance brokers in Calgary and Edmonton
Are you looking for a reliable broker who can find you cheap car insurance in Alberta? Trust the experienced team at TSG Insurance for customized car and motorcycle insurance in Edmonton, Calgary and beyond. Contact us today for more information or to get a free quote.