Ghost brokers: Protect yourself from insurance fraud in Alberta

Ghost brokers are on the rise in Alberta – so here’s how you can protect yourself from the province’s ongoing auto insurance fraud.

What is a ghost broker for insurance?

A ghost broker is another term for a fraudulent, unlicensed individual who pretends to be a legitimate insurance broker in an effort to sell fake insurance policies. This is typically done in one of two ways:

• Fake policies or pink slips are made to look like real documents and then sold to those looking for insurance. The ghost broker then pockets the premiums even though the coverage doesn’t actually exist.
• Legitimate insurance policies are purchased by ghost brokers with falsified details to lower the auto insurance rate. For instance, the age of the driver may be increased since older drivers tend to see lower premiums. But because the information is misrepresented, the coverage is actually void.

Ghost brokers commonly target newcomers or those who aren’t familiar with the auto insurance system. And while they can be recommended by others unknowingly, they are often found marketing their services on social media or through the phone.

Many victims won’t even realize the scam until it comes time to make an auto insurance claim. This is especially unfortunate, as lacking the right coverage can lead to significant financial burdens.

Beware of ghost brokers for auto insurance in Alberta

Recently, the Superintendent of Insurance in Alberta released a notice, cautioning drivers against such auto insurance activity. It cites a notable increase in reports of individuals offering fraudulent policies within the last year.

This comes shortly after a notice from Aviva Canada was released – citing incidents of a ghost broker identifying as ‘AllcoveredbyAviva’ or ‘Allcoveredbrokers in Alberta’. The fraudster claimed to be affiliated with the provider while advertising on social media and asking for money transfers for falsified pink slips.

How to protect yourself from ghost brokers in Alberta

To protect yourself from ghost brokers, there are many red flags you can be on the lookout for when shopping for car insurance – this includes the following:

• Insurance rates that are much cheaper than expected (use our Alberta auto insurance quoting tool for reference)
• The inability of the broker to provide proof of insurance right away
• The lack of a physical address
• Communication with social media, messaging apps, or personal email accounts
• A finder’s fee charge
• Cash, gift card, or bitcoin payments or payments to personal accounts
• No website from the seller
• No Google business account
• No business registration

You should also take the extra step and confirm your broker’s status through the provincial licensing record. In Alberta, this means visiting the Alberta Insurance Council and using the online look-up service. 

Plus, you can confirm the legitimacy of your insurance provider with the Superintendent insurance company registry, and check the validity of your policy by calling the insurer listed on your pink slip.

How do I report a ghost broker?

If you’ve fallen victim or suspect a ghost broker, report the incident to the police and inform the involved insurance company (if it exists). You can also call Crime Stoppers Canada at 1-877-244-TIPS or reach Équité Association online to leave a tip. 

The bottom line

While ghost brokers are on the rise in Alberta, it’s important to stay informed and vigilant during this time. To contact a trusted, licensed broker within the province, be sure to compare car insurance quotes with us today – we’ll connect you with a verified professional to help guide you through the process of obtaining your coverage as seamlessly as possible. 

Also read

• How much is car insurance in Alberta by age?
• The implications of Alberta’s auto insurance rate cap
• Auto insurance fraud in Canada