5 Common Car Insurance Scams

September 24th, 2009 |

There are many types of auto insurance scams – some involving car insurance companies and others involving individuals trying to scam the system. car

1. Being lowballed. This is where you do your research and hunt around for the best car insurance deal you can find. One company comes in way cheaper than the rest so you decide to go with them. Then 2 months later, once you’ve signed up and paid your money, you get a letter saying that there was a ‘company rate error’ and your premium is actually a couple of hundred dollars higher than the price you were quoted.

2. Buying from a Phony Agent. Just because an agent has a storefront doesn’t automatically mean that they are a real agent representing a real insurance company. A proof-of-insurance card can be forged just as easily as letterhead, business cards and signage can.

3. Going through a middleman who represents a Phony Company. While the agent may seem legitimate, you need to do your homework on the company they claim to represent.

4. Alliance between an auto insurance company and repairer that benefits them but not the insurer. For example, a car insurance company may recommend a repairer that inflates the worth of the car and then charges a high amount to repair the car. In this instance, the car should probably be written off as totalled but the repairer doesn’t do this because it will lose business and the insurance company will lose on deductibles.

5. Car insurance quote in exchange for personal information. If you receive a phone call from an insurance agent offering a free quote on car insurance in return for you providing personal information, don’t be fooled.