Tips for Identifying Auto Insurance Scams PDF Guide
Scams relating to auto insurance can take many forms, but they all have one thing in common – they cost everyone! All policyholders end up paying for inflated or improper payments associated with an insurance claim. That means you end up paying for someone else’s greed! By being an informed consumer, you can help eliminate these scams – and help lower auto insurance premiums. This brochure provides tips on how to avoid auto insurance scams, and help eliminate them too. It has been published by the Financial Services Commission of Ontario (FSCO), an arm’s-length agency of the Ministry of Finance that regulates financial services sectors, including insurance. FSCO works to enhance public confidence in, and access to, a fair and efficient financial services industry in Ontario.
How Do the Scams Work?
A tow truck driver may be paid a referral fee by a paralegal to refer accident victims to that particular paralegal. This is illegal. A paralegal may be paid a referral fee by a health care provider to refer accident victims to that particular health care provider. This too is illegal. A tow truck driver may be paid a referral fee by a vehicle repair or body hop to have damaged vehicles towed there. These types of tow truck drivers are known in the industry as “chasers.” A tow truck driver may be breaking a municipal bylaw by recommending a repair shop without being asked.
Many “chasers” are owned or controlled by vehicle repair shops. Insurance companies may choose not to do business with these shops. If the insurer does not deal with the shop to which your vehicle has been towed, your vehicle may need to be towed to another repair shop. But before that happens, you may be required to pay for the towing service, storage and possibly other administrative fees. These fees can add up to hundreds or even thousands of dollars, and your insurer may not cover these fees. If you refuse to pay them, the vehicle repair shop can apply the Repair and Storage Liens Act and sell your vehicle to cover the fees. To recover these referral fees, paralegals, tow truck drivers, repair shops and health care providers may “pad” their bills. In the end, you and other policy holders end up paying.
What Can You Do?
Be informed. If you require the services of a tow truck driver, paralegal or health care provider, know your rights. Here are some tips: ….
Download Tips for Identifying Auto Insurance Scams PDF Guide
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