Most people think of insurance fraud as unscrupulous drivers making false claims, but there’s a different type of insurance scam, where drivers themselves are the victims, having been sold fake or invalid insurance policies.

Car insurance premiums have been increasing over the last few years and, although there was a dip in 2020 due to Covid-19, which resulted in the reduction of traffic on our roads, the Insurance Times reported on 11 January 2021 that car insurance premiums are on the rise again. 

This leads many motorists to shop around for a better insurance deal, with many looking for discounts on their current premiums. This has paved the way for criminals to capitalise on motorists in hard times, by targeting drivers, particularly those with very high premiums. This is often young drivers, or those that have had an accident or have points on their licence, as these will attract higher premiums.

How to get a better car insurance deal without a ghost broker

You can often save money on your insurance premiums by discussing your needs with an insurance broker who is registered with the FCA.

There are a number of things you can do to reduce your premium, without risking having invalid insurance.

Reduce your mileage and it can reduce your premiums

Many of us are now working from home, which for many can significantly reduce the mileage you do each year in the vehicle. Many insurers will provide a discount for a reduced mileage as you are less likely to have an accident on the road.

Add car security to reduce your motor insurance

Many owners add extra security to a vehicle. These can often provide a discount from your insurer, if they are a recognised security option. Don’t forget to mention this to your insurer when obtaining a quotation. This could also include where you keep your vehicle, such as in a garage rather than on the street.

Use a specialist motor insurance provider

There are a wide range of affinity groups and brokers now offering specialist insurance for your vehicle; these could be for:

• Classic cars
• Use for a trade or profession
• Make of vehicle
• Modified
• Young driver insurance (telematics)

As a specialist provider they may have additional discounts and offers available for your vehicle.

About the author

Chris North FCII is a respected industry leader with over 40 years' experience, who has worked in the insurance industry in a variety of roles, accumulating a wealth of knowledge. He is currently Technical Manager for Towergate's motor division, providing expertise on all matters relating to motor fleet insurance, in particular haulage and self-drive hire fleets.

How does ghost broking work?

Ghost brokers target drivers looking to get a good deal, often found on social media platforms or through a friend of a friend at university or college.

The scam operates in a couple of ways:

1. The ghost broker will purchase a legitimate insurance policy, using false information, before selling it on to the customers, often using online insurance providers, who do not see the person who is taking out the insurance
2. The ghost broker will produce their own fake insurance policy documents, made to look like they have been issued by a legitimate insurance company. These are then sold to the customer.

Both will leave the customer with no valid insurance which puts themselves, their family and their property at risk of not being covered, should they be unfortunate enough to need to make a claim. Many customers do not find out their insurance is invalid until it is too late and they have handed over potentially many hundreds of pounds to obtain, what they thought was, a good deal on their insurance.

You can also be prosecuted for having no insurance and receive a fine and a minimum of six points on your licence.

How to avoid ghost broking

Using common sense when vetting brokers is important. Look out for discrepancies in their website, which often include:

• Spelling mistakes
• Broken links
• Low quality images
• Use of mobile numbers, rather than landline numbers
• Email addresses to a Hotmail or Gmail account, rather than a company domain

Be wary of links on social media: it is always best to check these out before purchasing from them. You can do this by checking brokers to see if they’re registered with the British Insurance Brokers’ Association (BIBA).

They also need to be authorised and regulated by the Financial Conduct Authority (FCA) to practice lawfully.

What to do if you have been defrauded by a ghost broker

If you suspect you may have fallen victim to a fraud, you can call the Action Fraud helpline on 0300 123 2040.

Motor insurance from Towergate

At Towergate, we are able to provide a wide range of motor insurance policies to suit your needs, including for cars, classic cars, classic motorbikes, taxis and driving instructors.

Read more on our motor insurance webpage.