AUTO INSURANCE ARTICLE
Be Wiser in 2009: Avoid Auto Insurance Fraud
By: james_writerAccessing information on how to get low-cost auto insurance and quotes from many companies has been easier than a decade ago, thanks to new technologies like the internet. But there is also a downside to this. As we are barraged with many information and offers, sometimes it is difficult to separate the right scheme from the right scam. Especially as the New Year starts, many crooks might be on the lookout to lure you to their offers. Read on and know how you can avoid auto insurance fraud.
Recently, documented cases of scams involving the offer of “cheap” auto insurance to unsuspecting consumers have been on the rise. It is difficult to know which is a scam and which is not. These offers appear to be genuine, but if you look further, they are nothing less than high-stake scams, intended to lure people into paying for auto insurance coverage that is either invalid or nonexistent.
What is the most common auto insurance fraud?
The most common scam is an offer of cheap auto insurance via advertisements in community flyers or newspapers. Often, the advertisement content is similar to offers made by known auto insurance companies or agents. Often, the claim of these advertisements is that they can provide you a cheaper auto insurance rate than what you currently have, or lower even than the lowest quote that you can get in the market. Most of these advertisements leave the name of the insurance company, sales agent, or broker unmentioned. But in cases where they give you a name, it is most likely ripped off from a legitimate company, or it is a non-existent entit
How does this scam go? The company or its supposed agent proceeds to get information from you about your driving history. With the information you have provided, this agent will then try to contact a licensed insurance company for an auto insurance quote. The scam starts when this agent pretends to be you. And not just that, as this supposed agent know the factors that could make your auto insurance rate lower, he pomps up your record, your personal information or driving history to get a lower rate. You will then be asked by this agent to pay to the insurance company directly, from where you will receive a proof of insurance coverage. But all these transactions involve paying this supposed agent as a broker’s fee. Scam alert! Legitimate brokers do not charge fees from you. He or she gets her pay from the insurance company. Not only that, since the information provided to the auto insurance company was false, the auto insurance coverage will not be honored and will be rendered invalid.
Another modus operandi to watch out is this. You get hold of an agent in the advertised company, who by then provides you with a quote. When the quote satisfies you, you are then requested to send your payment through a money wiring service. Others may even opt to meet you in person for your cash payment. Like the previous case, you have been scammed. There was no auto insurance coverage, and the person just got your cash.
And the sad part is that you only realize that you do not have valid auto insurance when you particularly need it, such as when you are involved in a road accident.
Remember, driving without valid auto insurance is illegal. Being scammed is not even an excuse. It is your responsibility to see to it that you are covered with valid auto insurance from a legitimate auto insurance company.