The purpose of a car insurance broker is to negotiate with different companies for you to try to get you the best deal for car insurance. They can also help get you better payments and terms for your existing policy. They use the knowledge they have as well as experience to help get you the best deal possible. Unfortunately, nowadays there are brokers that are out to scam people and steer them the wrong way. There are many reasons why a car insurance broker may do this. They may do it for self-interest, outright malice reasons or they may have a lack of any knowledge. There are a wide range of reasons on why you should not take a broker’s advice blindly. Listed below are a few.
They Can Manipulate Numbers
Another thing to watch out for with your car insurance broker is your policy. They may try to get you to sign up for policy and manipulate information like the rates in order to benefit them. An example of this is failing to tell you that a great price for a policy may only last a few months and after that the price will rise. Some may lie while others will just forget to tell you and pass right over it. The only way to avoid this is to check what the broker’s credentials are.
Suggesting Expensive Options
Some broker’s earn flat rates while other broker’s get paid by commission. This can mean that a car insurance broker can try to get you to go for the more expensive policies as their pay will be larger. An example is getting more liability than what you need or they can even try to get you to pay higher premiums. Insurance is a requirement but keep in mind that it should never get in the way of other expenses and make you uncomfortable financially.
Flat Out Scams
One of the worst things to watch out for is a plain out scam from a car insurance broker. These are illegal and it can happen in any way. The broker for example can fib about what the rate of the policy is and then pocket what the difference is. Another thing is if the broker works for an insurance company and tries to drive business in his direction. If the company is a fraudulent one, this is a bad thing and can be harmful. This leads to the policy you try to use non-existent and you will see that the company no longer exists.
For the elimination of an insurance broker manipulating any numbers, you can validate if he is real by asking the car insurance broker to show you a valid license to practice. You can confirm the license by contacting the state’s commissioner’s office.
There are however a few additional ways to tell if a car insurance broker is legit or not and can include:
- Wire Transfers – any insurance broker who tells you that payments have to be made with a wire transfer you should be wary of. Wire transfers are almost impossible to trace and are not always completely safe. If the broker is legal, they will have no problem using other payment methods where transactions can be verified and includes checks.
- Fees Up-Front – any broker who is legitimate will never ask for a fee up front and they don’t charge fees
- If they don’t have a physical location – any car insurance broker who is legit will never refer you to a company that is solely on the internet and has no physical address. If the insurance company has no address, then you should not use them and find another insurance broker.
While all this sounds doom and gloom you can also find solid brokers that will help you out, just take this word of warning and do your research and you’ll be well on your way to finding cheap car insurance.