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Don’t Be a Victim of a Fake Auto Policy

It’s every driver’s nightmare that’s just been in an accident. You call your auto insurance company to report the accident and receive a recorded phone message, saying: ”This phone does not accept incoming calls.”

You discover that the person who sold you your policy wasn’t an insurance agent after all – they were just masquerading as a broker and selling fake policies – and you’re left holding the bag.

Fake insurance companies cheat consumers by collecting premiums for phony policies that will never pay claims. These “companies” might be difficult to contact by phone — if they even have a listed phone number. Before signing an application for a policy, you should check to be sure that you are dealing with a genuine, licensed insurer. You can get licensing information through your state insurance department. For a link to your state insurance department Web site, check out the National Association of Insurance Commissioners.

You can also check out the insurance company’s rating online with A.M. Best to make sure they are a real company, and have the resources to pay out any claims.

Be aware of telltale signs you may not be dealing with a legitimate agent or company. Here are some red flags to watch for:

• An offer of insurance from someone who knocks at your door
• An agent who offers to backdate your policy
• Any misspellings in paperwork provided to you by an insurance agent
• A demand for payment in cash or with a money order
o Legitimate companies usually accept credit cards, or allow you to set up a monthly direct deposit for your premium.
• Failure to provide documentation or an ID card
• Failure to receive an insurance ID card or a copy of your policy within a few days
o Check to see that the premiums you paid have been received by your insurance company

If you’re looking for car insurance on the Internet, make sure that the insurer’s website is secure. Check for a URL that begins “https:” or a lock icon in the address bar.

Report Insurance Fraud
Most states have special fraud bureaus, usually based within the department of insurance. These bureaus investigate cases regarding insurance fraud from different sources. If you believe that you have been a victim of insurance fraud, or if you are aware of an instance of insurance fraud, it is important to:

• Contact your state insurance department to file a complaint against the insurance company; and/or
• Visit and complete the form provided by the Online Fraud Reporting System.

If you get a bad feeling or don’t feel comfortable about the agent or insurance company you are dealing with, don’t sign any paperwork or give them any money. Contact your state insurance department and confirm the company or agent offering insurance is legitimate and licensed to do business in your state.

Remember, if you do have a fake car insurance policy and get into an accident, you’ll be left on the hook and responsible for paying all damages out of your own pocket.

Have you ever been the victim of insurance fraud? Feel free to share your thoughts in the comments section below.

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