What is a “Ghost” Broker and How to Avoid Them

Insurance seems like a pretty straight forward business. Although it can be confusing choosing the right policy, for the most part, consumers feel safe in finding a broker or insurance company who will provide them with the services they need. However, in the insurance business, insurance fraud might be more common than you might imagine. One of the dangers posing a risk for consumers is the growing incidents of ghost broking. Here is everything you need to know about ghost brokers and how you can avoid them.

What is Ghost Broking?

Ghost broking is the illegal selling of a fake or invalid car insurance policy. Ghost brokers attract their victims through social media and cost-saving forums using low premiums as an incentive. This is common practice in many countries, particularly in the United Kingdom. It can be hard for consumers to spot ghost brokers. Targets tend to be people less familiar with insurance policies. It might be a young driver trying to save money on their car insurance, or someone who is new to the country who not only doesn’t understand how insurance works in Canada but also does not understand the language. This is why it is common to find ghost broker ads on money-saving forums, social media and student websites. A good example is a recent report by CTV covering a Hamilton, Ont., mother who lost thousands of dollars and her drivers’ license when she purchased bogus auto insurance. Inass Mohamed was unaware ghost brokers had targeted her until she made an insurance claim following a collision.

How does Ghost Broking Work?

There are three ways ghost brokers will take advantage of their victims: 1. Forgery: Ghost broker use real insurance documents, that they forge to look like they belong to someone else. They change the dates and replace the name with yours when there is actually no policy purchased in your name. 2. Falsification: Ghost brokers buy an insurance policy on your behalf using fake data to make it more affordable. This might involve lying about your age to get you lower premiums if you are a new driver. Other false info might be lying about where you live and work, the type of car your drive, your job title, etc. in an effort to bring down your rates. This creates a fraudulent policy which means if the insurer finds out, your policy is void. This can lead to issues getting a new policy. 3. Cancellation: Sometimes, ghost brokers do everything by the book, but then cancel your policy to steal the refund. You will be driving unaware you no longer have insurance. You lose the money you paid out to the insurance company, have no valid insurance and can face the standard punishment for driving without insurance. Inass Mohmed lost her car, was ticketed for driving without insurance, and was also fined $5,000. It is easy for ghost brokers to take advantage of consumers who are strapped for cash but still need to drive.

How to avoid Invalid Insurance

Ghost brokers are very good at what they do. They tend to share insurance documents that look real. It takes a trained eye to spot issues. To protect yourself, you can take some precautions. First, you should avoid unknown or uncertain sources, including social media and money-saving forums like Kijiji. Next, if the offer sounds too good to be true, don’t even bother enquiring. Instead, make sure the business you buy insurance from is licensed. These companies are mandated to follow the rules and laws of insurance.

Common Discounts

If you are in need of affordable auto insurance rates, there are some common discounts you can look for with reliable insurance brokers such as Oegema Nicholson, including:

• Multi-vehicle: Discounts are always available if you have more than one vehicle
• Mature/Age: Many companies offer discounts based on age
• Multi-policy: If you insure your car and home, most companies offer a package discount.
• Short Commute/Low Mileage: Many companies offer discounts for a short commute or no commute.
• Alarm: Aftermarket alarms qualify you for a discount.
• Winter Tires: Some companies offer discounts if you install winter tires.
• Conviction Free: If you are conviction free in the previous 3 years some companies provide a discount.
• Away at School: If your child attends college or university, you can qualify for an occasional-driver premium discount.
• Experience: All companies consider driving experience to calculate your premium.
• Deductible: Higher deductibles come with a discount under some policies.

You can work with a reputable insurance company to come up with the best possible rates to keep your car insurance more affordable. For more information, speak to our team of experts by calling 613-224-1455.