How to Avoid Cheap Car Insurance Scams

By Contributing Writer

Overview

It is not unusual for people to want high quality auto insurance at the best price possible. Scammers know this fact and often attempt to use it to their advantage. Unfortunately, it is sometimes difficult to tell legitimate car insurance providers from people and companies that only want to take your money. In order to protect yourself from these scam artists, there are several things you can do to avoid getting involved with any car insurance scams.

Step 1

Always get the quote in writing. The document may be an email, printed on company letterhead, or be a quote form with the company's logo at the top and the signature of the issuing agent at the bottom of the document. Legitimate firms are always willing to back up their offers in writing. Scam artists rarely do.
Step 2

Explore the terms and conditions associated with the quote you received. While this can be time consuming, it is necessary. Signing a contract commits you to abiding by anything that is contained within those terms and conditions. Make sure you understand and agree with everything before you sign.

Step 3

Ask questions when something in the terms and conditions governing the coverage seems vague or could be interpreted in more than one way. Honest insurance providers welcome questions of this type and have no problem discussing them at length until the client is satisfied. Scammers will attempt to circumvent the question and draw your attention to other aspects of the coverage.
Step 4

Check with local governmental agencies that approve insurance providers to operate in your jurisdiction. Only deal with car insurance providers who are recognized by your jurisdiction as legitimate and in full compliance with current laws and regulations.
Step 5

Review the process for submitting a claim. Scammers tend to make this step somewhat more complicated than legitimate insurance providers. If the process seems convoluted and the average waiting time for a response is excessively long, you could be dealing with a scammer.
Step 6

Look for consumer reports on the insurance provider. Consumer reports can be obtained by checking out consumer reporting websites or by conducting a browser search using the provider's name. You can also obtain hard copy documentation from consumer watchdog agencies.

Skill: Moderate
Tip: If an agent attempts to expedite the contract by telling you the rates are offered at a discount and only for today, thank the agent and look elsewhere. Legitimate companies want customers to take their time and make informed decisions.
Warning:
Avoid any insurance offer where the insurance agent attempts to intimidate or scare you into making a quick decision.

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