CBC recently published a story about a Toronto Mom who spent her entire severance pay on car insurance but instead of gaining coverage, she became a victim of fraud by a rogue insurance broker.
Some highlights from the story:
- The Toronto mother had been laid off from her job due to COVID-19
- A local insurance broker told her she could get a good deal on a policy for two vehicles by paying $6,000 upfront to cover the year's premiums
- She used her entire severance to cover the expense
- Four months later, she discovered her policy had been cancelled citing non-payment
- The broker she dealt with had sold her a genuine policy, but was accused of pocketing some of the premium money
- She was listed as making NSF payments, affecting her credit score
Patrick Ballantyne, CEO of the Registered Insurance Brokers of Ontario (RIBO), said consumers should feel "safe" despite the difficulties Sharaf faced. His organization protects consumers on insurance transactions by licensing brokers, providing a complaint process and taking disciplinary action in cases of wrongdoing.
Consumer advocates advise:
- Beware of insurance premium quotes that appear to be too good to be true
- Significantly lower quotes should be a red flag
- Send payments to the brokerage versus an individual broker
- Ask for a receipt
- Contact your provincial regulator to confirm your broker is licensed and in good standing