Buying a new car followed by an expensive insurance policy can eat up a huge chunk of your savings. After this, insurance fraud is the last thing you want on your plate. Insurance fraud has already cost the auto insurance industry billions of dollars and the numbers keep rising every year. You cannot change the fact that insurance scams are pretty common, but with a little precaution, you can certainly avoid them.
It will be easier for you to avoid getting scammed if you know what are the common scams that the fraudsters try to pull off and that’s exactly what we are going to talk about in this article.
Also, if you are looking for Edmonton car insurance then make sure you only opt for reputed insurance providers like Surex to avoid getting scammed.
Common Insurance Scams And How To Avoid Them
Here are some common types of car insurance frauds observed in the industry and ways how you can avoid them
This is hands-down the most common type of scam. In these cases, a con artist pretending to be an agent would approach you and fool you into buying a policy from them. Once they receive the money from you, they will hand you a fake agreement. Now when you actually get into an accident you would discover that you have no insurance policy in your name to cover that.
While dealing with an insurance agent you can do the following as a precaution
- Always ask for their license
- Run a quick check on the internet to verify their credibility
- Request references to cross-verify their claims.
After all, huge investments like insurance, demand a little extra precaution.
Sometimes, it’s not just an agent but the entire company that’s fraud. Mostly it’s the online companies with no physical office and offering unbelievably cheap premiums that are potential scammers. In these cases, it’s always better to opt for companies that have an established name in the market and an authentic website with a pool of testimonials from verified customers.
Free Windshield Replacement Fraud
The word “free” is so enticing to our ears that it can often push our common sense to the backseat. Through a windshield replacement scam, malicious car wash centers or garages might exaggerate the extent of damage or offer you a free windshield replacement in the name of special offers and trick you into signing the Assignment of Benefits (AOB) form.
This form permits them to file a claim under your insurance policy and receive the payment from your insurance company. To make things worse, these replaced windshields are often of low quality which imposes a serious threat to your safety on the road.
The best way to avoid falling into a windshield replacement scam is to avoid all shady free offers. Also, never sign any unwanted document provided by a garage or car wash center. Even if you do so on the demand of the situation, carefully read the terms and conditions and the fine print.
Tow Truck Fraud
Spotting a tow truck coming to your rescue when you are stranded in the middle of nowhere can feel like a blessing. However, if you were not the one who called it, there are high chances of a “bandit” tow truck. In these cases, the fraudsters might take your vehicle to their own shop and try to extract money from you.
To avoid getting scammed, you should always do the following:
- Ask about their service and how they came to know about your wrecked car.
- Demand a printed receipt that would contain a summary of the service, charges as well as basic information about the business.
- Also, if they appear too shady, call up your insurer and confirm if they actually sent you the tow service.
It might also happen that you do not have a better option at that moment. In that case, ask them to tow your car to a garage that you trust instead of their own shop no matter how hard they insist. It’s also advisable that you do not reveal any information about your insurance to them.
Fraud Committed By A Third-Party On-Road
Not all scams are cold and pre-planned. Sometimes when you get into a car accident, the other party involved may try to push the blame on you. In doing so, they will be saving their claim and also get their car repaired for free through your insurance. Mostly, it happens in the heat of the moment, as a means to avoid repair expenses.
In this case, you should never take the blame to avoid the hassle. In fact, you should try to acquire as much detail about the accident as possible. Starting from witnesses to CCTV footage, these documents would make your case stronger and save you from these amateur scammers.
Car Insurance Fraud: FAQs
Here are some commonly asked questions about car insurance frauds.
How Do I Report Car Insurance Fraud?
If you suspect auto insurance fraud then call up your local police or your insurance company and let them guide you through the course of action. In Ontario, you will either be asked to submit an anonymous tip to Crime Stoppers or file a report with FSCO’s Auto Insurance Fraud Hotline
What is the punishment for committing car insurance fraud in Canada?
The punishment depends on the seriousness of the fraud committed and can range anywhere between 2 years to 14 years of prison time along with a hefty fine.
Is Lying On Your Insurance Application A Fraud?
The insurance provider is not always wrong. Sometimes, to get better quotes, people lie on their application without realizing that it’s a criminal offence and can lead to a hefty fine as well as prison time. It will also increase your premium rates and your insurer will most probably drop you.
These are the 4 common types of insurance fraud that you should avoid. Now that you have had a walkthrough and understood how exactly these scams are committed, we hope it will be a little easier for you to avoid them. A little precaution can go a long way in avoiding the unscrupulous drain of your hard-earned money.