Find out what ghost brokers are and the pitfalls of using such a broker
Best intentions aren’t enough in the world of insurance. Even if you’re playing by the rules, making sure that you’ve insured your vehicle, things can still go wrong.
Would you know if you’d been the victim of motor insurance fraud ghost broking? Sadly, many people wrongly believe that they’re covered by a car insurance policy.
What is ghost broking?
This common insurance fraud means that you should always be wary of getting insurance from a broker. If a deal seems too good to be true, there’s a good chance it actually is.
Ghost brokers usually operate in one of three ways. They’ll sell you an insurance policy that seems valid and legitimate, but doesn’t actually protect you:
*Sometimes, ghost brokers sell fake policy documents. These are made to look like the real thing, so that their victims are often unaware. They’ll tell you that you’re paying for insurance and will be covered by a well-known provider. You’ll receive realistic documents that might convince you, but won’t actually be covered at all.
* Alternatively, ghost brokers might use fake details to buy real insurance policies at the cheapest possible prices. Then, they’ll make up false documents for you. You’ll receive a real policy number that’s linked to a real insurance policy. The policy might even be in your name, but won’t be worth anything due to discrepancies in the details.
* Some ghost brokers provide full and valid insurance in your name, using all of the correct details. Shortly after you’ve paid and received the official documents, they’ll cancel the policy and walk away with the refund.
However a ghost broker operates, the end result is the same. You have an insurance policy that doesn’t exist or won’t be valid, and you’ve probably paid a small fortune for it.
What are the issues for drivers?
If you’re driving with a fake policy, you don’t have insurance cover. If you’re caught, you may be given a £300 fixed penalty notice and might have your car seized. You may have to pay for your car to be returned, once you’ve bought genuine insurance.
If you’re uninsured and involved in an accident, you’ll likely be liable for all damage caused to your vehicle, the other person’s vehicle and any injuries caused. That’s a lot to worry about if you thought you had fully comp cover!
The City Of London Police website lists the potential punishments for not having valid insurance, which may include points on your licence.
How to spot fake car insurance policies
Before you use an insurance broker, look for tell-tale signs that they’re not operating completely legally.
Initially, make sure that they have a working phone number and a valid address. Many ghost brokers set up fake websites to collect your details, and may be operating from a home address whilst pretending to be somewhere else. You can check an address on Google Maps, but should be aware that often Streetview data will be months, or years, out of date.
Look out for Instagram ghost brokers who tend to target young people through social media accounts. These social media profiles promise surprisingly cheap car insurance for younger drivers, using typical ghost broker techniques. Try to avoid clicking adverts through social media, as these could have been set up by anyone.
At any time, you can check if your own vehicle is listed on the
Motor Insurance Database This is completely free, and can be used as often as you’d like. Check at regular intervals, to make sure that your policy hasn’t been cancelled.
Once you’ve set up your insurance policy through the broker, and have paid your insurance premium, give the insurance provider a direct call to check that it’s all up and running. You can ask them to run through the details to make sure that everything’s above board and legal.
Why do people fall for ghost broker insurance fraud?
With car insurance prices so high, and the costs of running a car only ever seeming to increase, it’s understandable that drivers want a great car insurance deal. They’re looking for the cheapest prices, and often look beyond the well-known price comparison websites.
Going through a car insurance broker can be a lot cheaper than going direct, or using a well-known comparison site. So, people aren’t always suspicious when they’re presented with much lower premiums.
The drivers are the victims, unaware that they’ve wasted their money and their vehicle may not be protected. But, these risks can be avoided with due diligence on your part.
For more information about ghost broking motor insurance fraud, watch
Car Insurance: Costs and Cons? on ITV catch up.