How to Avoid a Cheap Car Insurance Scam

To avoid car insurance scams, don't give information to random callers, avoid online insurance ads, don't buy suspiciously cheap policies, and verify car insurance companies.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 20, 2021

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Here's what you need to know...

  • There are several different types of insurance policy scams
  • Being vigilant can help you protect your personal information and financial health
  • Using a comparison tool can help you pull up real insurance policies that meet or exceed your state’s minimum insurance regulations

When it comes to getting the best deal for your auto insurance, you need to pay attention to the details. Otherwise, you could end up with a scam policy that won’t do you any good if you get into an accident or incident with your vehicle.

One of the easiest ways to avoid a car insurance scam is by using a comparison tool from a trusted site. These tools only look for insurance policies from reputable carriers.

Enter your zip code above to find car insurance rates that work with your budget today!

Common Auto Insurance Scams

Insurance scams can come from an actual insurance agent or a fake agent.

These individuals may offer you car insurance at extremely low rates or car insurance you don’t want or need in order to inflate their commissions.

The Robo-Call Scam

You’re sitting at home when your phone rings.

When you answer, it’s a voice explaining that you’ve been chosen to receive incredibly cheap car insurance due to your impeccable driving record.

All you have to do is provide your personal information. If someone calls you and wants your personal information, you should always hang up.

The Fake Insurance Agent

You’re looking for cheap car insurance, and you come across an agent’s ad for ultra-cheap auto insurance. You click on the ad, and it takes you to the insurance agent’s website where you blindly apply for the coverage and agree to pay a certain amount each month for that coverage.

If the agent is fake, your premiums are going directly into his or her pocket, and you won’t know it’s fake until you call to make a claim.

The Unethical Insurance Agent

Many insurance agents are professional and ethical, but a few are not.

These agents may artificially inflate your premiums in order to pocket the excess, or they may add coverages onto your policy that you didn’t ask for in order to increase their commission.

They may even recommend changing your insurance policy to a different, more expensive policy because it “offers better coverage.”

The Ultra-Cheap Insurance Policy

If a car insurance policy sounds amazingly good, you should be extremely leery.

If it is a legitimate policy, it may not meet your state’s minimum requirements, which could leave you underinsured and liable for being sued if you get into a car accident that is determined to be your fault.

If you come across any of these scenarios, you should immediately screen the calls or block the phone numbers and report them.

Reporting the incident flags the number so that they can be investigated, taken out of business and potentially criminally prosecuted.

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Enter your ZIP code below to view companies that have cheap car insurance rates.

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Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

Avoiding Insurance Scams

Avoiding insurance scams involves being vigilant and refusing to provide your information to someone who you did not call.

You should also only view insurance policies from reputable insurance carriers.

  • Never provide information to an unsolicited caller – If a company or person calls you, never provide your personal information, especially if you are not actively shopping for car insurance.
  • Be wary of clicking on online insurance ads – The advertisement may look legitimate, but you are better off locating the insurance company and agent via an Internet search rather than clicking on the ad.
  • Research the agent – Even if the agent does work for the stated insurance company, he or she may not be ethical. Always research the company and the specific agent before purchasing a policy.
  • Research the insurance company – If you’ve never heard of the insurance company, it’s best to do your research to find out if they are licensed and legally allowed to operate within your state. You can accomplish this by looking on your state’s insurance department’s website.
  • Never agree to purchase super cheap insurance – If the cost of the insurance policy is 90 percent below average, there’s a good chance the policy is either fake or doesn’t cover what you think it covers. Always read the details of the policy.

Getting a New Policy from a Reputable Insurance Company


Rather than going to 15 different insurance websites and filling out quote forms on each site, use a reputable car insurance comparison tool.

These tools are designed to provide you with multiple insurance policies from various companies, which will allow you to compare prices and policy details.

Once you’ve narrowed your list, go ahead and read about the available carriers and agents to make sure you will get a good rate and good customer service.

If you want to go above and beyond in your search, review the company and insurance agent’s ratings with your local Better Business Bureau and read their online reviews.

Once you have chosen the right insurance company, agent, and policy, go ahead and purchase it online.

After you purchase your new policy, you will be able to print out the details and your temporary insurance cards right from the comfort of your home. Your permanent cards will be sent to you by mail.

To compare car insurance rates from top companies in your area, just enter your zip code below!

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Enter your ZIP code below to view companies that have cheap car insurance rates.

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