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Ontario Residents: Be Wary of Auto Insurance Fraud - GetInsuranceQuotes.ca

July 26, 2013

It's often been said that if something seems too good to be true, then it probably is. In most cases this advice can be heeded to great effect, but a few Ontarians didn't take the adage to heart when responding to some new newspaper ads that promised cheap auto insurance, and it caused them to suffer at the hands of a significant con. Because of this most recent insurance con reported by Ontario Provincial Police, a few too many residents of Ontario are finding themselves financially hurt and sans coverage for auto insurance should an accident or theft occur.

Details

These fraudulent insurance ads have been circulating since February 2012 in Ottawa and Toronto free classified listings, and have been found in online classifieds like Craigslist, as well. The ads promise cheap insurance for any and all drivers, and will sometimes use the names of legitimate insurance companies in an attempt to increase their credibility, in addition to company names like Smith and Sons, Arthur and Sons, and Addison and Sons.

When a customer eager for a great deal contacts the scammers, they'll take the personal information of the hopeful driver, including their vehicle information, driving history and contact information. Afterwards, the cons will falsely quote them an insurance price, which usually proves to be significantly less than the premium they're currently paying. The cons will then encourage the customer to wire them the insurance payment, usually via Western Union or a similar wiring option.

Sometime after the payment is sent and received, the customer will receive a well-made insurance card with their details and information. However, no auto insurance is actually included with the holding of this slip, which could prove disastrous if an accident occurs. The cons cover their tracks by using disposable, pre-paid cell phones, so there is no way for the police to track down the perpetrators. The police are adamant that individuals looking for new auto insurance providers do so carefully, and research the company thoroughly before committing to a purchase.

Tips to Avoid Auto Insurance Scams

With the vast amount of auto insurance providers in such a competitive market, it can be a challenge to sift through the companies and weed out the frauds from legitimate ones, so it's vital that prospective customers do their due diligence and remember that if it sounds too good to be true, then it probably is. In regard to this scam, insurance shoppers should be careful to look for the following:

Before choosing to take out a new auto insurance policy with any company, take a bit of time to ensure that they hold a license through the Registered Insurance Brokers of Ontario. All insurers have to register with the Financial Services Commission of Ontario. Should an insurance provider not be listed with these organizations then they aren't legitimate insurers, and they should immediately be reported to the proper authorities.

The Canadian Anti-Fraud Centre can be reached by calling 1-888-495-8501.

Just to be sure of your safety, always avoid sending insurance payments by way of wire, as it isn't possible to be sure of who will receive it. Deals that seem like they're too good to be true most likely are, which is why you need to be thorough in researching any insurance company you are considering going through to make sure they're legitimate. Assuming that you have valid insurance coverage when you don't could cost you untold amounts of money if you get into an accident, which is why it's more than worth it to know that you're insured by a legitimate company as opposed to selecting an insurance broker just because you'll save a few dollars on your premium.

The auto insurance industry in Ontario is very competitive, but if you come across a quote that is obviously lower than it should be, you should immediately be skeptical. The best thing you can do to protect yourself against this kind of fraud is to ensure the legitimacy of the company and broker. This can be easily done by contacting a regulatory agency to be sure that you aren't the next one to fall victim to one of these scams.

Additional Resources & Advice

Looking for more information on auto insurance Ontario? We've prepared some guides to help you:

Visit our Insurance Tips & Information Centre for more useful information on auto insurance.