Be Sure to Avoid Car Insurance Scams

Fraudulent insurance cards are becoming an increasing problem in some Eastern states. State troopers have been pulling over cars, asking for proof of insurance, and calling the 800-number on the back of the card. What they reach is a pay-by-the-minute phone sex line. Officers believe that some owners of these fraudulent insurance cards are aware of the scam, but some are not. Law enforcement officials are reporting finding the cards in more and more states. To help you avoid this scam, we’ve compiled all of the information you need to know to stay safe.

About the Cards

Typically, these spurious insurance cards are discovered because the plates on the associated vehicles do not have current or authentic registration stickers on them. When troopers pull the vehicles over, they commonly discover the fake cards. The fake proof of insurance cards can be purchased for $300-$500, which is about half the cost of an average auto insurance policy. The cards are made much like fake I.D.’s. A valid insurance card is scanned, and the counterfeiters then change the information on the computer screen. They can change the policy number, issue date, vehicle ID number, etc.

The Costs

The fake insurance cards are not just a harmless counterfeiting prank. New Yorkers especially have paid a steep price as a result of the scam. Officials estimate that New Yorkers have lost millions to the fake insurance card scam. Usually, if a vehicle with fraudulent insurance papers hits another vehicle with legitimate insurance, the legitimately insured vehicle’s uninsured motorist coverage should pick up the tab. However, if an uninsured motorist with fake insurance papers hits a pedestrian, that leaves the pedestrian with the responsibility of paying his medical bills unless he has sufficient health insurance.

The Source

Most of the vehicles with these fraudulent insurance papers originate from Pennsylvania. Officials speculate that this is because proof of insurance is not required to register a car in that state. One out-of-state officer estimated that about 60% of insurance cards are fraudulent on cars with Pennsylvania plates. The Department of Motor Vehicles suspects that they are sending license plates out to insurance brokers, but they are not receive the appropriate paperwork back. Some officials also suspect that some DMV employees may be getting a cut of the profits from the scam.