With very few exceptions, states require you to have current auto insurance coverage in order to drive legally. The primary reason for this is to make sure that you can cover repairs and medical costs in the event of an accident. While auto insurance is easy to get, this requirement leads to a significant amount of fraud in the form of fake car insurance cards.
The large amount of auto insurance fraud that occurs every year comes from two sources: drivers trying to save money on auto insurance and fake companies trying to make a quick buck. While drivers who knowingly fake proof of auto insurance cards or tags are an issue unto themselves, getting conned into buying a fake auto insurance policy can also land you in a lot of legal trouble, even if you didn’t buy it knowingly.
This article will cover:
- What is fake car insurance?
- The dangers of fake auto insurance coverage
- How to avoid fake auto insurance companies
How fake car insurance works
The are two types of people who use fake car insurance:
- People who do it on purpose.
- People who got conned.
Unfortunately, the penalties can be similar for both. Here's how each type of fake car insurance works.
Getting fake car insurance on purpose
There are templates available online to make fake auto insurance cards, tags and proof documents from a printer. What’s worse, some people think it’ll work. Running that risk to save money has little payoff and many penalties. Overall, a fake auto insurance card only works until you use it.
If you are pulled over or in a car accident, police will require you to show proof of current car insurance. The only way a fake auto insurance card will work in this instance is if the attending officer only gives it a glance. Given the attention to detail needed in order for an officer to file a report after a collision, this probably won’t happen. This is considered insurance fraud and comes with a laundry list of penalties.
Getting fake car insurance by accident
Sometimes well-meaning people think they’ve bought actual car insurance coverage only to find out that their auto insurance provider is fake and their coverage doesn’t exist.
These fake auto insurance providers, often fly-by-night and very temporary, will make you believe that you’re purchasing legitimate auto insurance. They will even use the actual names (or very similar names) and brand logos of reputable car insurance companies. They’ll make you believe you’re getting authentic coverage at unbelievably low rates. But remember: if it’s too good to be true, it probably is.
Ghost brokers are another trend in auto insurance fraud that causes serious issues for people sincerely looking for car insurance. Ghost brokers put themselves forth as the middleman between car insurance providers and drivers. They will either buy a policy themselves with fake information, sell the policy to others and cancel it afterwards or just sell you a fake policy outright.
The dangers of buying fake car insurance
Both drivers trying to game the system and drivers unknowingly buying fake auto insurance policies suffer very similar consequences. It’s insurance fraud whether you’re aware of what you’re buying or not. At the very least, you'll face penalties for driving without insurance. If you go to court with a fake auto insurance policy, the penalties include:
- Towing or impounding your car.
- Suspending or revoking your driver’s license and/or your vehicle registration.
- Fines running in the hundreds, if not thousands, of dollars for driving without insurance.
- Jail time, possibly for years.
Those are just the possible legal consequences. Even if you are able to prove that you unwittingly purchased fake auto insurance, you still have to pay for any damages or injuries accrued after an at-fault accident. That can be several thousand dollars out of pocket.
Fake auto insurance red flags
If you purchased auto insurance coverage online and are concerned that it may not be real, the first step is to contact the provider through the official contact information on their website. Do not verify through the agent on your policy. Also, you can try contacting the DMV to verify the issuing auto insurance company.
Here are some warning signs that your auto insurance isn’t legit:
- Look for misspellings in your insurance policy. Authentic auto insurance providers are all about concise terminology for legal reasons. Typos shouldn’t be an issue in a policy from an actual insurance company.
- Any requirement to pay your premium in cash or by money order is a serious danger sign.
- If the underwriting agent offers to backdate your auto insurance policy, run. Backdating means your auto insurance start date is before its purchase date. No legitimate insurance provider would do this for the legal problems it would bring down on them.
- It’s a big tip-off that something’s wrong if you cannot get an insurance binder or any documentation of your insurance coverage.
When you buy auto insurance, make sure it’s from a licensed, verifiable provider. When you buy car insurance, you will receive a temporary proof of insurance card that should be valid for between 30 and 60 days.
Once your auto insurance premium payment clears, a permanent card will be sent to you. If your card is lost or damaged, contact your provider to have a new one sent. Many auto insurance companies have a downloadable version of your insurance card you can print out at home. However, the one you can get directly from your provider is sturdier, unless you have a laminator at home.
Bottom line: fake car insurance
Simply put, intentionally getting fake car insurance is a terrible idea. The penalties are severe and the pay-off is minimal. And be careful to not get duped into buying fake car insurance. Verify that your insurance company is legitimate and not an imitator.
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