Auto Insurance Agent

Reader’s Question:

I’ve heard that some auto insurance agents are involved in scams. What are examples of these?

Jacob

Las Vegas NV

Sadly, in order to get more commissions, a lot of auto insurance agents engage in fraudulent schemes that is aimed to get your hard earned money away from you. A common practice involves selling allegedly cheap automobile insurance. At first it may appear genuine but is actually intended to trick you into paying for coverage that is either invalid or doesn’t exist at all.

Here’s one example. A person will pretend to be an agent will offer you rates that is lower than what others are said to be offering. That person will then tell you to pay a fee for this particular service. After you give him all the necessary information, he will then call an insurance company and pretend to be you. The thing is, that person will lie to the company on certain information that you gave in order to get lower rates. After that you will pay your premium to the company and get a proof of coverage.

What’s wrong with this picture? When he asks for a fee, that should have alerted you. Licensed auto insurance agents will never ask for payment from you. It is the insurance company that will pay them for getting you as a customer. Further, you are actually not covered since the information given was not true.

Another example for you to consider. An ad promises to give you insurance at low rates. To sweeten the deal, it offers free coverage for a certain number of months. When you call the company that advertised, they give you a quote. Once you find the quote good, they will then ask you to send money through a money transfer or have someone meet you. In reality you don’t have coverage because no such thing happened. All they did was pocket your money.

As you can see, one way of knowing whether they are licensed auto insurance agents is the existence of a fee. If they ask for it then do the right thing. Put down that phone.