As consumers, whenever we purchase a product or service, it is essential to keep in mind the Latin phrase “caveat emptor” – let the buyer beware. In essence, it is a principle to follow when buying something to make inquiries about the product or service you wish to acquire, and in turn, be sure you understand what it is you’re purchasing. That general rule of thumb applies to making any purchase, including buying a car insurance policy.
Many consumers go through an insurance broker or insurance agent when buying an auto policy, and there are many benefits to doing so. But it’s in your own best interest to ensure the broker or agent you are dealing with is licensed and authorized to sell auto or property insurance in your province.
Fraud is one of the many factors that affect the cost of auto insurance premiums. Unfortunately, many unsuspecting consumers may be hoodwinked by a dishonest individual or an unlicensed brokerage selling insurance policies fraudulently, as one Toronto woman did last April after she shelled out $6,000 upfront to cover her premium, only to discover a few months later that she wasn’t insured.
More recently, the Registered Insurance Brokers of Ontario (RIBO) and the Financial Services Regulatory Authority (FSRA), Ontario’s car insurance regulator, both issued warnings to the public about the Hidden Ace Brokerage, as it is not licensed by RIBO or authorized to sell insurance products in Ontario. Consumers who purchase insurance from unlicensed entities or persons are not protected under the province’s Insurance Act.
In the event you unknowingly buy a fraudulent or fake insurance policy from an unlicensed broker or agent, beyond the fact you’ve wasted your money, potential problems will arise, including:
Here are a few recommended tips to help you avoid falling victim to an insurance scam:
If you believe you’re a victim of insurance fraud, take the following steps:
Another way to avoid falling prey to insurance scams is to use a free, online car insurance quoting tool to compare policies and premiums from a variety of insurers. It’s also the best way to find the coverage you need at a price you can afford, and all the insurers and brokers that partner with RATESDOTCA are licensed.