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7 Tips to Avoid Auto Insurance Scams

July 23, 2008

Fraudulent activity occurs in the business world and the
insurance industry is no exception. The Insurance Institute of Canada estimates
that 10 to 15% of insurance claims in Canada are fraudulent and the latest
insurance scam in Ontario involves the sale of fraudulent auto insurance
policies to unsuspecting drivers.


These con-men lure unsuspecting consumers through false advertising, offering the sale of unbelievably cheap auto insurance through newspapers, commercials and over the Internet. It’s common for scam artists to ask for an up-front fee and cash payment which is a warning sign that you may NOT be dealing with a licensed insurance agent. 

Completing a quote on InsuranceHotline.com ensures that you are always connected with an industry approved, licensed insurance broker or agent you can trust. InsuranceHotline.com does not charge any up-front fees and is a completely free service for consumers.

If an offer seems too good to be true, follow these tips to avoid buying into auto insurance scams:

1.  Research the name of the representative to ensure they are legally allowed to sell auto insurance. Visit the Financial Services Commission of Ontario website (www.fsco.gov.on.ca) and click Insurance Agents Licensed in Ontario.

2. Verify with the Financial Services Commission of Ontario website (www.fsco.gov.on.ca) that the insurance company you are dealing with is licensed.

3.  Avoid paying up-front cash fees. Licensed agents and brokers do not charge fees.

4.  When applying for auto insurance, you must complete an application form called the Ontario Application for Automobile Insurance (OAF1). Check for accuracy if your licensed broker or agent completes the form on your behalf.

5.  Always carefully read any documents you sign.

6.  Steer clear of paying for your auto insurance through a wire transfer. This is not a safe practice in the insurance industry.

7.  Always shop around for the lowest car insurance rates.
To ensure that you are working with a licensed broker or agent, get a quote on InsuranceHotline.com, your one stop destination for all your insurance needs including car, home, motorcycle, and life insurance. InsuranceHotline.com allows you to instantly compare the rates from over 30 top insurance companies for free.

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