Here is a brief for car insurance fraud containing information to educate UAE residents about what can go wrong and what residents should “NOT” do when purchasing their insurance policy. The good news is that there is a checklist to go through to ensure you are not being scammed.
Enter ‘Ghost Broking’ – A notorious type of auto insurance fraud that’s been making the rounds all over the world, and has now reared its ugly head in the UAE. Ghost brokers pretend to be genuine insurance agents acting as middlemen between insurance providers, brokers and drivers but they are car insurance claim frauds. They scam car owners by providing the “cheapest deal”, the quickest policy or “cash facility” convenience.
How can it all go wrong?
The “Cheapest deal” on the market
Insurance providers do not go on SALE. There is always a catch if someone offers you a policy that is cheaper than the price on the policy. The typical scam is they take cash from the consumer but never pay it to the insurance provider/broker. Without any payment proof provided to the broker/insurance company, your policy may be downgraded to Third-Party only.
What to check for: Always ask for an official receipt from the insurance provider or the broker even if it is through the dealership.
Tampering with car value
There is also the case of changing your car value without your knowledge (we have even seen the value of the car being tampered with on the policy) and therefore offering you a lower price. The surprise comes when it comes to a total loss and your claim pays you a lower amount than what you thought the car value was.
What to check for: Always request the policy to be sent to you directly to your email by the broker/aggregator or insurance company.
DIY: Do it yourself
The best solution is to not allow any individual to represent you unless they are a regulated broker/aggregator or insurance company.
- The price on the policy may be tampered with by the person selling you the policy, by adding a mark-up on it. This is not legal and should be reported if you come across anyone doing so.
Be Aware: Always ask for the policy document to be sent to you directly from the broker/insurance provider and insist that the price and car value is mentioned.
- Paying cash to an independent insurance representative who never pays that amount to the provider. And as long as your policy has not been paid for you cannot make a claim.
Be Aware: Avoid cash payment and always ask for an official receipt from a regulated company.
- Your policy gets cancelled by your agent without your knowledge and he cashes the refund while you are driving an uninsured car.
Be Aware: DIY – do your own research and represent yourself when purchasing a policy.
Your checklist
1. Is this person or agency I’m dealing with a regulated entity allowed to sell insurance?
2. Is the policy/quote being sent to me directly to my email from the regulated entity?
3. Is the price on the policy the price I paid for? If cheaper, often brokers/aggregators or insurance providers would give you a discount, which comes out of their commission. Anything more than 5-6% of the price should be questioned.
4. If I am paying by cash, am I giving it to the entity issuing the policy or to an independent person? It is best to request a payment link online to the aggregator site or insurance provider site and pay with your credit card.
5. If you are buying your car through a dealership, always ask for the policy document to be sent directly to you including the price on it, and the official receipt not from the dealer but from the company issuing the policy. (Only a broker/aggregator or an insurance company can do so.)
