Steer Clear Of These 3 Auto Insurance Scams

Scam artists operate in every industry and insurance is no exception. Preying on well-intentioned, uninformed people is how they make a fast buck and move on to their next mark. The best way to protect yourself from auto insurance scams is to know what to watch out for. The following three swindles all involve using cheap insurance rates as the draw.

Scam 1

Incredibly cheap insurance is advertised and it is hard to resist getting an auto insurance quote. The quote seems legitimate and the first low-cost premium is paid. Within a month or two, a letter is received stating that you owe more money. Due to a “company rate error,” you now owe hundreds more for your car insurance. Large, reputable insurance companies do not perpetrate this type of double-cross. To avoid being taken in, contact the Better Business Bureau about companies before taking advantage of offers that sound too good to be true.

Scam 2

An individual posing as an insurance agent or broker offers to arrange low-rate insurance for a fee. You provide your driving history, as you would when applying for any auto insurance quote. The “agent” then impersonates you but lies to the insurance company to get a lower rate. You pay the premium and are none the wiser. The problem is that the insurance is not valid since fraud was committed to secure the policy. Insurance agents and brokers do not charge fees to provide insurance quotes. Steer clear of those who do.

Scam 3

The gimmick with the third rip off is free insurance. This free insurance is offered for a specific period of time. Getting something for nothing is hard to turn down and this is no exception. You apply for an auto insurance quote. The quote is reasonable and looks like a good deal. You are then asked to wire or transfer funds to pay for the insurance. There may be a request that you deliver cash to someone. Beware of this auto insurance scam. There is no insurance involved. It is not an insurance industry practice to ask for payment by wire, transfer or cash. Being asked to pay in this manner is a red flag. Investigate the company further.

There will always be underhanded individuals looking for a way to make a fast buck. Do not be duped by these nefarious crooks. When shopping for insurance, check the A.M. Best rating for the companies you like. This rating reflects the financial strength of insurance companies. Strong companies do not resort to deception to sell insurance. Doing business with financially robust, reputable companies will guarantee that you don’t fall victim to auto insurance scams.


How To Avoid Auto Insurance Identity Scams

New ways to scam you for your identity are popping up daily. At present, the scam that is causing the most concern for individuals and the police is fraudulent insurance I.D. cards. Many individuals are buying these cards that will let them register their vehicles and keep them from having to pay for insurance. However, there is a rise in the numbers of individuals also unknowingly purchasing these cards and thinking they are really buying an auto insurance policy as well. Thieves are targeting unsuspecting consumers, and are found to be preying especially in immigrant communities.

Avoidance of these scams, as well as others, is not difficult if you know what to look out for. Make sure that when you go to purchase auto insurance, it is from a reputable and licensed individual or company. Verification of the person or company selling the auto insurance can easily be obtained through the department of insurance. Also, do not store personal information on a cell phone. If you lose the phone or if it is ever stolen and it winds up in the hands of a scammer or thief, then you may find your identity compromised. Be alert and conscious of others standing too close for comfort when you write out a check, handle important papers, or use your credit cards in a public place such as your insurance agency or any other place of business. Thieves are not picky about which way they can steal your identity and personal information, and they will resort to the over the shoulder method.

Make calls to the company or individuals; this will also assure you that they are indeed legitimate. You can also protect and avoid scams by opting for full coverage on all of your vehicles. This way, it protects you from scammers that may hit you on purpose and not have any coverage of their own.

Also, if someone calls you on the telephone and tells you that there is a problem with your coverage, auto insurance rates, or with a payment you have made in the past, disregard the phone call and hang up without giving them any information. Getting to know how your insurance agent works will also help you in making the decision whether or not the call is actually coming from your agent or insurance company. If you have questions or think that there may be a legitimate problem with your coverage, call your agent yourself. Never give your information over the phone.