What to do When Caught in a Car Insurance Scam

Two businessmen shaking hands

You’ve just got into a car accident. You made sure that you and the other driver(s) are safe, exchanged insurance information with all parties involved, reported the incident to a police officer, called your insurance provider, and they got started processing your claim.

However, have you considered if you’re a victim of a automobile insurance scam? It can be a growing concern amongst Canadians – especially those in Ontario.

Following a recent survey commissioned by the Financial Services Regulatory Authority of Ontario (FSRA) nearly 75% of respondents with auto insurance believe that auto insurance fraud is prevalent in Ontario, and more than 40% of them are worried they could become a victim of auto insurance fraud.

So how can you spot a car insurance scam? Let the Good Hands Advice team help.

What are Car Insurance Scams?

To learn how you can spot a car insurance scam, you must first understand there are no accidental scams. You’re either aware that you are committing the fraud or unfortunately you’re the victim of one.

We hope that through this article you’ll be able to recognize the different types of car insurance scams.

Types of Car Insurance Scams.

Staged Car Accidents

According to FSRA, this acts as a means for scammers to preoccupy emergency responders by bringing them to the scene of the accident that they intentionally caused, defraud citizens, the healthcare system, small businesses, and the insurance industry.

If you believe that a car collision you’ve been involved in may have been staged, remain calm, and contact the authorities. Do not, under any circumstances, use any of the scammer’s recommended tow trucks, repair shops, healthcare provider, etc.

Contact your insurance company, explain the situation, and they will be able to provide you with their approved vendors to help in this situation. Remember, you have the right to deny services offered by the repair facility that are not in line with your (or your insurance company’s) preferred vendors.

FSRA also identified two other types of insurance fraud to be mindful of:

Proof of Insurance Fraud

Your proof of insurance is sometimes called a “pink slip”. It has personal information, including your policy number, vehicle identification number, expiry date, and the names and addresses of those insured on the policy. In an auto insurance scam, you may be presented with illegitimate or fabricated proof of insurance.

According to FSRA, “in exchange for payments, fraudsters pretending to be licensed insurance agents or brokers will sell counterfeit insurance policy documents and pink slips.”

Insurance Agent Scams

Unfortunately, if you are dealing with an unauthorized insurance agent, you may be victim of an insurance scam. These “agents” may, among other things, inflate the cost of your car insurance rates and keep the difference for themselves.

If you live in Ontario, FSRA shared tips on their website.

What To Do If You Fall Victim To An Insurance Scam?

If you believe that you are a victim of an insurance scam, here are our recommended steps:

  1. Take as many detailed notes as possible about the event. Including who was involved, the other car’s make and model, description of the driver, etc.
  2. Contact your insurance provider. Explain the situation to your agent and they will be able to advise on next steps.
  3. Create a police report. Your agent may already make this recommendation but be sure to report the incident to police as soon as possible to create an accident report.

If you believe that you were a victim of an insurance scam, you can call the Insurance Bureau of Canada’s anonymous, toll-free TIPS Line at 1-877-IBC-TIPS (1-877-422-8477) or submit a tip online at ibc.ca.

Disclaimer: This information and the websites referenced are provided for your convenience only and should not be construed as providing legal or insurance advice. Allstate does not control or guarantee the accuracy of any content on any third-party site.  Allstate is not responsible for the privacy practices of any third-party site.