False Advertising

Crooks often advertise the sale of cheap auto insurance in community newspapers or flyers. The advertisements may even resemble those of a legitimate insurance company or individual licensed to sell auto insurance.

Typically, these advertisements claim they can find you auto insurance coverage at rates lower than what you have been paying or quoted in the past.

Some advertisements do not identify the name of the insurance company, sales agent or broker. Where a name is provided, it is probably being used fraudulently or it is phoney.

Two Common Auto Insurance Sales Scams

1) The Scenario

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 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 fees, they receive payment from the insurance company.
• Your auto insurance coverage is invalid because the information provided to the insurance company is false.

2) The Scenario

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.

Source: www.fsco.gov.on.ca

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