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How to Protect Yourself From Fraud When Buying Auto Insurance

Did you catch the story on the CBC last month about a Toronto mother who was defrauded out of $6,000, money that she thought was going towards an auto insurance payment?

You can check out the full story here, but in a nutshell, what happened was the insurance agent that the woman dealt with had pocketed her money.

To add insult to injury, it took a month for the woman to reinstate auto insurance coverage at a reasonable price. As we’ve talked about many times here on the blog, not paying your insurance premiums can flag you as high risk and make getting coverage more difficult and expensive. (Check out this post if you want to learn more about that).

So given this story, we thought that it might be a good idea to go over what you can to protect yourself from fraud when purchasing auto insurance coverage…

3 Auto Insurance Fraud Protection Purchasing Tips

1 – Does the price you’re being offered sound too good to be true? It probably is…

When you’re on the hunt of cheap auto insurance, your search for the best rates possible might affect your judgment. You might be tempted to snap up an amazing deal being offered, but think twice. When you’re shopping around for insurance (getting quotes from various providers is an important way to ensure you get the cheapest rates possible, as we’ve talked about here), if you come across an insurance plan that is markedly cheaper than the other quotes you’ve been given, that might be a sign to do a bit more due diligence. While certainly different providers have different rates, extreme variations in costs should be looked at carefully.

2 – Look to the Registered Insurance Brokers of Ontario (RIBO)

All provinces in Canada have licensing boards for the insurance industry and they are designed to protect consumers and regulate insurance brokers. In Ontario we have RIBO. When purchasing auto insurance, ensure that the broker or organization you are dealing with is licensed by RIBO. Use their search functionality to look for a specific broker, or a brokerage licensed to work in Ontario.

{If you’re wondering about Insurance Buddy, if you pop our parent company, INSUREIT GROUP INC., into the search you can find all of our information including our RIBO registration number: 3538. We only add brokers to our team who have received their licensing from RIBO.}

3 – Consider the payment transaction

Are you being asked to send money directly to an individual broker and not the brokerage itself? That should be a red flag. And be sure that once payment has been sent, you have obtained a receipt with all the pertinent details of the transaction. Keep this in your records. In fact, you should be keeping detailed records with all the information about your auto insurance coverage.

If thinking about insurance fraud and the story of this Toronto woman has you worried, the CEO of RIBO, Patrick Ballantyne, did stress in the article that what happened in this instance is a very rare occurrence. The important thing to remember is to do your due diligence and make informed decisions on your quest for cheap auto insurance in Ontario.  

Unfortunately, this story highlights just one type of fraud that can occur with auto insurance. Stay tuned for future posts where we discuss avoiding fraud with a collision, as well as auto repair fraud.

Have any questions at all about getting cheap auto insurance coverage in Toronto and around Ontario? Contact one of our insurance specialists today, or click here to get an auto insurance quote online.

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