CJ Campbell joins forces with Drayden Insurance Ltd.
June 17, 2024
If you get a phone call or a social media message from someone claiming they can get you cheaper car insurance, your Spidey senses should start tingling. As the old saying goes, if it sounds too good to be true, it probably is.
The Alberta Superintendent of Insurance issued a consumer alert recently regarding fraudulent auto insurance from an unlicensed agent/broker (“ghost broker”). The alert specifically describes two different ways a person can be misled.
In one scenario, the fraudster contacts a legit insurance company on behalf of the client (victim) and creates fake information to give the insurance company in order to secure a low auto insurance rate. In this scenario, the client thinks they are covered because they have a policy with a real insurance company but that isn’t true. In order for their insurance to be valid, it must be based on full disclosure of accurate information about the insured. Since the “ghost agent” gave false information to secure a lower rate, the insurance company may deny a claim or void the policy. In most cases, the client has paid the fraudster a service fee, and an insurance company premiums for a policy that isn’t valid – without having any clue.
In another scenario, the fraudster forges an insurance policy and provides a fake pink card to the client. The forged documents can appear very real – even naming an actual insurance company – but sadly the client has given cash to someone who isn’t licensed at all.
In both scenarios, victims have no idea they have been scammed until they suffer a loss (when having valid insurance is most needed).
What can you do to make sure you aren’t a victim of a “ghost broker”?
- Be suspicious of anyone calling you, reaching out on social media, or emailing from a personal email account (like gmail or Hotmail) trying to sell you insurance broker services or cheaper auto insurance rates.
- Don’t make any cash payments or send any money for services. Also don’t trust anyone who asks to be paid in bitcoin or gift cards.
- If someone claims to work for an insurance company you’ve heard of, confirm the insurance agent and insurance agency they work with by looking them up through the Alberta Insurance Council (AIC) online look-up tool.
Aviva Canada has warned of a “ghost broker” known as AllcoveredbyAviva or Allcoveredbrokers. But all insurance companies are aware of this new scam and warning people to be cautious when approached with promises of lower auto premiums.
The best way to make sure you’re getting the right coverage at the best price is to talk to a professional insurance broker. The more your broker knows about you, your vehicle, your driving history etc., the better they can find you auto insurance options that meet your needs.
