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TDI warns about buying fake auto insurance policies
Plain English Summary
The Texas Department of Insurance (TDI) is warning people about the increase in fake auto insurance policies being sold online. Scammers, who are not licensed by TDI, take money from consumers but do not provide any real insurance coverage. When these consumers get into an accident, they find out their policy is worthless and they are not covered. Scammers often lure victims with offers that seem too good to be true, especially on social media.
To protect yourself, always check if an insurance agent is licensed by calling TDI’s Help Line at 800-252-3439 or searching online. Avoid paying for insurance through third-party apps, and be cautious of anyone pressuring you to buy insurance quickly. After purchasing a policy, confirm directly with the insurance company that you have coverage. If you suspect fraud, report it to TDI using the same phone number.
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The Texas Department of Insurance (TDI) offers tips to help Texans avoid auto insurance scams online, warning that scams and fake policies are on the rise.
Scammers without a TDI license to sell insurance collect money but never use it to buy coverage with an insurance company.
“Then the consumer is in a car collision, attempts to file a claim, and finds out that the policy they have isn’t valid, and they're not covered in any form or fashion,” said Fraud Unit investigator Capt. Kevin Lemon.
Fraudsters often target victims on social media with unusually low-cost insurance offers.
“They might get lured in by the fact that it's way cheaper than going through an insurance agent. And, unfortunately, you get what you pay for,” said investigator Capt. Tyler Hampton.
Hampton and Lemon offer these tips:
Call TDI’s Help Line at 800-252-3439 or
look up an agent online
to know if they have a TDI license.
Don’t pay for insurance using third-party apps. Insurance company apps are OK.
If someone tells you that you must act today or you'll lose the offer, that's usually a bad sign. Legitimate insurance plans won’t have purchase deadlines. Don't be rushed when shopping for insurance.
After you buy a policy, call the insurance company directly to confirm that there is a policy in your name.
Hampton said insurance fraud affects everyone, from the person in the car accident with a driver who didn’t have insurance to everyone who pays for insurance.
“When insurance companies are out hundreds of thousands of dollars, they pass that down and it causes premiums to go up,” said Hampton. “And we all share the burden of that.”
Report suspected insurance fraud online
or by calling TDI at 800-252-3439.
Resources
Don’t use third-party mobile payment apps to buy insurance
Insurance fraud could happen to you
Types of fraud