IBAO warns of auto insurance “hoax”

The Insurance Brokers Association of Ontario (IBAO) is warning Ontarians about a province-wide automobile insurance hoax.The association notes ads have been circulating throughout the media in dozens of cities across the province advertising automobile insurance. IBAO contends that “these ads are a hoax.””Consumers should be leery of offers that include six months’ free automobile insurance and offers to reduce your current rates by 50%,” IBAO President Dave Hare says in a statement. “If it seems too good to be true, ask questions.”The association is encouraging prospective policyholders to research the name of insurers provided to them, whether on the Internet, by checking a phone book, or by calling another broker. “Always ask for details about the agent or brokerage you are dealing with (name, address, web address, etc.),” the IBAO recommends in its release. “Be vigilant and carefully read the documents you sign. Never sign anything without having read it.”IBAO notes that all licensed insurance companies operating in Ontario can be found on the Financial Services Commission of Ontario web site at www.fsco.gov.on.ca. Broker and brokerage licensing status can be found at www.ribo.com.The IBAO’s press release comes within a week of the Insurance Bureau of Canada (IBC) announcing it has uncovered a $1-million insurance scam. IBC says it is investigating a scam operated out of 22 dealerships across the province and that has cost 1,800 policyholders between $300 to $600 each in up-front fees. Overall, IBC says insurance crime costs companies and policyholders about $3 billion per year.