Insurance experts warn to watch out for “ghost brokers,” people who position themselves as an insurance agents or brokers without having the licence.Insurance experts warn to watch out for “ghost brokers,” people who position themselves as an insurance agents or brokers without having the licence.

Fraudulent schemes are pushing up premiums in Ontario and are also tricky for drivers to spot, according to a poll by the Financial Services Regulatory Authority.

By Srivindhya KolluruSpecial to The Star

Mon., March 27, 20232 min. read

A new survey has found that a vast majority of Ontario drivers believe auto insurance fraud is widespread — and are worried about becoming the next victim.

Ghost insurance brokers. Staged collisions. Inflated repair costs. These are just some of the schemes going on that are pushing up premiums and are also tricky for drivers to spot, according to a poll by the Financial Services Regulatory Authority (FSRA).

Daniel Ivans, an insurance expert with RATESDOTCA, says ghost brokers — people who position themselves as an insurance agent or broker without a licence — are one of the more common frauds.

“As a driver, this type of specific fraud would not impact or have an impact necessarily on your direct premium, but it could have an impact on coverage,” explains Ivans. “Drivers can protect themselves from being defrauded by somebody by going online and researching the company that that person represents.”

You can also check that your insurance professional or company is licensed with FSRA.

Matt Hands, Ratehub.ca’s VP of Insurance, says you should also be cautious of brokers that ask you to pay for coverage with cash or an e-transfer.

Next, be on the lookout for staged accidents. These incidents can take several forms, experts say, but an example is a driver in front of you intentionally stopping short and quick to get you to hit him.

Hands says staged accidents are often caused by drivers who want to file an insurance claim for repairs or to completely write off their car for cash.

“Another scenario that we’ve heard about is you’re pulling out of a parking lot or onto a road, and somebody waves you in, but the driver hits you right as you’re going in,” says Hands. “And then it looks like you’ve entered a busy road without looking both ways.”

If you suspect you’ve been involved in a staged accident, it’s important to take photos of the damage to your car and immediately inform your insurance company of what’s happened.

Ivans and Hands explain that while protecting yourself from a staged accident is tricky, installing a dash cam can help prove that you were a victim.

“If there’s no proof to show that you were following the rules of the road and the other driver put you in this vulnerable state, it’s going to be one of those ‘he said, she said’ scenarios,” explains Hands. “Without proof, that at-fault accident will increase the price you pay for insurance.”

JOIN THE CONVERSATION

Conversations are opinions of our readers and are subject to the Code of Conduct. The Star
does not endorse these opinions.

More from The Star & Partners