The great boost of insurance service providers on the Internet has inevitably led to the flourishing of some fake car insurance companies. They are websites operated by con artists who try to pose as genuine insurers.
Such websites will either run off with your money straight off the bat, or mail you a fake insurance card. It's important to keep an eye out for such schemes, and this short guide will show you how to spot a fake insurance vendor.
If it swims like a duck and quacks like a duck then it probably is a duck. If you spend $1,500 a year with your current insurer and a company that you never heard of throws in a $300/year deal for the exact same coverage then you would better think twice before handing over your money. Basic liability insurance policies usually cost more than $50 a month – and this is at a bare minimum.
Granted, you can save money if you shop around, and new or small companies often offer consistent rebates just to stand out in the crowd, but an outrageously low price is usually the sign of a scam.
The beauty of the Internet lies in the user generated content and the speed at which you can find lots of information about companies. If the insurer you are investigating is not on the popular auto insurance company rating lists you will have to do some research on your own.
Query sites like AM Best, they keep records of all insurers in the United States. If your chosen company is not listed then it's probably a scam or a very new company you can't rely on yet. Alternatively, you can even run a background check with the DMV before purchasing the policy.
A TOS page that is blatantly copied from another insurer's website – or the complete lack of one – is always a sign of fraud. Also look for poor wordings and grammar mistakes – a genuine company can always afford to write a good copy writer, while a scammer can't.
Also check the overall appearance of the website. A sloppy design is, again, a clear indication of a scam. Genuine insurers' websites have neat designs, while a lot of fake sites look like they have been built by "a man in a white van".
The best way to stay on the safe side is to go with one of the many reputable insurers on today's market. Most of them are competitively priced, so it just doesn't pay up to go with a shady company for the sake of a few dollars a month. For the price of a cheap meal per month you can rest assured that your property is well insured and there is someone there to reimburse you in the event of an accident.
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