|Insurance Seller Scams|
Most of us think of insurance fraud as someone trying to defraud an insurance company. However, there is another type of insurance fraud that can affect you when buying a policy. Insurance seller fraud is when a fraudster sells a fake or inaccurate insurance policy. In most cases, they offer very low rates to draw in victims. Once the person pays, they give them forged or invalid pink slips.
Victims of insurance seller fraud may not realize that the broker was a fraudster until their insurance claim is denied. This leaves victims having to pay out of pocket for an incident. If the fraudster supplied inaccurate information on the insurance form, the victim may even find it hard to get insurance in the future.
Ghost brokers are fraudsters that take payment for insurance policies upfront and then disappear. In most cases they provide a forged pink slip. However, they can also set up a real policy and then cancel it without the telling the victim.
Fake brokers often have a real business (e.g., selling cars) and a physical address. They buy an insurance policy in the name of the client and provide an insurance slip. But to get lower rates, they will often include incorrect information in the policy. When it’s time for the victim to make a claim, it will be denied due to inaccurate information.
If you encounter insurance seller fraud, please report it to the IBC.
This information is brought to you in collaboration with Sonnet Insurance. Get a home or car insurance quote today.