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Ghost Brokers – Be Aware of This Insurance Fraud

Ghost Brokers – Be Aware of This Insurance Fraud
Ghost Brokers are individuals who disguise themselves as insurance brokers and wrongfully interact with the public under the false pretext of selling insurance. They blatantly defraud the public by claiming they are selling insurance when, in fact, they don’t represent an insurance company at all. They are simply selling fraudulent insurance and looping innocent people into their scams. Unfortunately, this type of fraud has left well intentioned victims believing they had insurance, when they actually don’t have insurance coverage for their auto, home or other insurance needs.

Not only can this type of fraud leave you uninsured and out hundreds, possibly thousands of dollars, but it could leave you legally vulnerable. For example, to operate a vehicle in Canada, your car must be insured. Vehicle owners must carry liability insurance, and one can face significant legal repercussions for failing to have insurance coverage. Another example is that mortgagees often require homeowners to carry home insurance so that in the event of a loss, home assets are fully protected and home equity preserved.

Ghost Brokers may also provide you with fake insurance documentation that appears authentic and legitimate. This fraudulent documentation could include a policy and a “pink slip.” A “pink slip” is also known as a liability slip. These slips have your name, mailing address, vehicle information, insurance company, and policy information. Unfortunately, these insurance coverage slips can be fraudulently created and counterfeited.

How can you protect yourself from fake insurance coverage?

When purchasing auto, home, or other insurance, it is crucial to speak with an insurance professional who is appropriately licensed and qualified to sell insurance. Only purchase insurance from a brokerage or agent you trust. Otherwise, you may fall victim to insurance fraud.

To confirm a specific insurance broker’s license status, refer to the licensing body within your province. Often the website will have a search function where you can confirm a specific broker’s status. You can also ask the broker or agent for his or her license number and cross reference this number on the licensing body website. Purchasing insurance from a licensed broker will help ensure that your auto or home will be covered in the case of a loss.

If you suspect someone of Ghost Brokering or have fallen victim to a Ghost Broker yourself, report it immediately to your local police and the Insurance Bureau of Canada (IBC) at 1-877-IBC-TIPS (1-877-422-8477).