As household budgets tighten, a bargain on auto and home insurance may feel like welcome relief, but consumers should beware when seeking out deals on their insurance coverage!

A recent Insurance Business Canada report highlights a warning from Peel Regional Police: economic pressure can create an opening for criminals offering insurance that is cheap, fast, and fake. The result may be individuals left with a forged Liability Insurance Card (or “pink slip”), a policy that was never activated or bound, or maybe even coverage obtained using false information without the buyer fully understanding what was submitted.
 

Why Fake Insurance is Dangerous

Drivers may not discover the fraud until they are stopped by police, try to renew a licence plate, or make a claim after a collision. By then, the financial consequences can be severe. A victim could face vehicle damage, liability costs, legal trouble for driving without valid insurance, and difficulty obtaining legitimate insurance coverage later.

Also, personal details shared with a fraudster, such as a driver’s licence number, address, banking information, or vehicle identification number, could be used for identity theft down the road.
 

Be Aware of the Warning Signs

The following are a few of the signs you should watch for when shopping for insurance:

• A premium that is dramatically lower than every other quote, with no clear explanation. Beware of deals that seem too good to be true!
• Pressure to pay immediately by cash, cryptocurrency, gift card, or e-transfers to a personal banking account
• Communication that is only through social media, text, or a free email address
• Requests to misstate your address, driving history, annual mileage, or the primary driver
• A broker, agent, or insurance company whose contact details cannot be independently verified

Verify Before You Buy

First, confirm that the person and business are licensed. Ontario consumers can check a broker’s licence through the Registered Insurance Brokers of Ontario’s (RIBO) online registry. Insurance companies can be checked through the Financial Services Regulatory Authority of Ontario.

Do not rely on a link, phone number, or a screenshot supplied by the seller. Find the official contact information independently, then call the insurance company directly to confirm the policy number, coverage, effective dates, and payment status.

Read the completed application before signing and insist on copies of the application, policy, receipts and all correspondence. Even if an intermediary suggests that changing an address or omitting a driver is “normal,” false information can jeopardize a claim or cause a policy to be cancelled.

Pay through a traceable method to the licensed brokerage or the insurance company named on the documents, not to an individual.
 

If You Believe You’ve Been a Victim

Stop further payments and contact the legitimate insurance company or brokerage using verified channels. Preserve emails, texts, receipts, advertisements, names, telephone numbers and screenshots. If you suspect fraud or have been victimized, report it to local police and the Canadian Anti-Fraud Centre.

Fake insurance works when urgency replaces verification. Take a moment and pause before accepting an unusually cheap offer. Check the seller’s credentials, confirm coverage directly with the insurer, and keep a complete paper trail.

A few careful steps before signing up for a new insurance policy can prevent a supposed bargain from becoming an expensive loss.
 

Give Staebler a Shot

Staebler Insurance has been insuring Waterloo Region for over 150 years. Proudly Canadian and strongly independent, our team of licensed insurance experts provide advice and advocacy for your home, vehicles, seasonal properties, business, and more. Connect with a RIBO-licensed broker at STAEBLER.COM/Quote

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Staebler Insurance is a general insurance broker specializing in car insurance, home insurance, small business insurance, and commercial insurance. Staebler Insurance Brokers proudly serve Kitchener, Waterloo, Cambridge, Guelph, Stratford, Listowel, Fergus, Elora, Wellington County, Perth County, Waterloo Region, the Greater Toronto Area, Golden Horseshoe, Niagara Region, and all over beautiful Ontario, Canada. 🍁 Get a Quote to get started today.