Car insurance scams

Reader question:

My friend got suckered into a car insurance scam. What kind of scams are out there and how do I avoid them?

Samantha

Glad you asked.

Insurance just automatically rings some very ominous bells with some people. It sounds like the kind of business that’s just out to trick you out of your money in the moment you most need it. People are often suspicious of the insurance industry because of this. However, it’s actually a lot cleaner than many people think. Scams are out there, sure, but they’re few and far between. For the most part, you’re swimming in safe waters in the car insurance industry, and ones with lifeguards too, considering how closely the state watches this industry.

Most of the time, people think they are scammed because they didn’t understand their policy or were confused. This could be the fault of the car insurance company for not properly explaining it to them, but the truth remains that usually nobody was tricked, just a little loss. The worst you can accuse most insurance companies of is bad customer service, not scamming. However, scams are still out there and there are ways you can evade them.

  • License. Make sure your insurance company is licensed and registered with the state. In order for your car insurance policy to even count, legally, the company has to be registered. And if they’re registered, they’re also being watched.
  • Look around. Get different quotes and be wary of deals that seem to good to be true. When you go to one insurance company, ask them about another one and the lower rates there. Challenge them a little, and don’t believe everything you see.
  • Don’t sign blank forms. Get a complete copy of your policy so that you can read over it and know what you’re signing up for.
  • Can they answer any questions you have to ask? They should be able to help you with any and all confusion you have about your policy.
  • Don’t pay in cash and always get a receipt.

Cheers,

Fashun Guadarrama

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  • Sam

    hey do you know about the “swoop and squat” fraud scheme?

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