Car Insurance Scams in the UAE – 6 Ways to Avoid Them
Car Insurance Scams in the UAE – 6 Ways to Avoid Them
Car insurance scams are a dime a dozen out there. It makes you unsure of who to trust. Car insurance is there to protect foreseeable and unforeseeable circumstances. It is counterproductive for everyone when car insurance scams disabuse that trust.
As an insurance comparison website, we would like to bring these car insurance scams to light. We would also like to give 6 tips to avoid them next time you’re out shopping for insurance.
Car Insurance Scams
There are several insurance scams, but car insurance scams are harder to pinpoint. You’ll usually deal with car insurance salespeople or sales representatives when buying car insurance. This is an opportunity for scamsters to defraud you out of your hard-earned Money. When you try to find them, they are long gone and can’t be traced.
The irony here is that car insurance scams rely on a combination of things to go right for them to get away with their ploy. The buyer only needs one thing to go right to save themselves from fraud.
Ghost brokers are the most common type of car insurance scam out there. The way they work is that they act as a genuine middleman between the insurance company and the buyer. They often buy insurance policies from providers on behalf of the customer. However, they fill in the wrong information to get lower premium rates.
They charge customers a fee for their services, often citing their involvement as the reason they got such cheap rates. Then they disappear. The customer is left with a policy that does not provide full coverage and will be terminated as soon as the insurance provider realizes its information is false. Both the company and customers lose out in this situation. The only one who benefits is the ghost broker.
However, there are many ways to vet a broker to check if they are genuine or a scammer. They will insist on meeting in a public setting or at your home. This is because they don’t have office space and are not affiliated with the insurance company.
They will offer you their employee discount and a No Claims Bonus, even if it does not apply to your policy. These are red flags. You should call the insurance company and ask to speak to the broker. If they say they have no one of that name in the company, you will know it’s a scammer.
Cheapest Deals in Car Insurance Scams
Another way they rope you in is by offering very cheap premium options. These differ from discount and cheap insurance ads on insurance companies, comparison websites, and social media platforms.
Many customers can attest that when they enquired about the discounted rates from company agents and comparison website representatives, they were told that the discount didn’t apply to their car make and model. So they were given a realistic rate.
This is not the case with car insurance scams. They will insist that the lowest premium rate applies to the most expensive cars, and only they can get it done. Yes, cheap car insurance is great, and anyone would love to have the lowest rate, but it’s also a red flag that you should look further into.
Consider your car and your policy requirements. Does it seem like the cheap rate the broker is offering is unrealistic? Then it probably is. Do your due diligence. Could you not take their word for it?
Cashing It Out
Another red flag you should be aware of is when the ghost broker wants to deal only in cash. Cash transactions are notorious for being used in car insurance scams. Cash exchange, especially when done by hand, is practically untraceable.
With bank transactions, funds transfers, and online credit or debit card payments, you always know where the Money came from and where it went. Car insurance scams want to avoid that payment trail, so they insist on cash payments.
To counter this, insist on paying online. Ask for their account details and insist on fund transfer through the bank. Banks now have apps where you can conduct any banking business online in real-time. Whip out your phone and ask for the company account number.
If they give you the account details, check that it is indeed the company’s account and not a personal one. Abort mission if they give a personal account.
Just Use Comparison Websites
If you don’t want to deal with ghost brokers just jump on an insurance comparison website. Not only are they registered with the proper authorities, but they vet the insurance companies for you.
They usually have 24/7 helplines where insurance experts can give you advice, and none of them work on commission so they aren’t invested in selling you something you don’t need. Because of their partnership with insurance companies and car-related businesses you can get discounts for other services for your cars like getting a wash, maintenance checks, and battery upgrades.
Best of all, they only operate through online payment systems. So, you can avoid a car insurance scam and get pretty sweet deals while you’re at it.
Car Insurance Scams FAQ’s
What should I not tell the insurance company?
Here is the list of nine “do not tell” your car insurer:
- Accepting your fault
- I think
- I am fine
- Any names
- Pre recorded statements
- Extra Details
- I don’t have any lawyer
- I admit
In which claim most frauds occur?
Application fraud is the most common fraud. It occurs when the insurance provider provides the false information for any application.
Can insurance companies lie to you?
Yes! Unfortunately insurance adjusters are allowed to lie to you. Many of them are even encouraged to do so.
Can you sue an insurance company for the misinformation?
Yes! If the insurance company provides any misinformation, you can sue them.
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Originally published Oct 10, 2020 22:54:41 PM, updated Sep 14, 2022