What is a ghost broker?

A ghost broker is an unlicensed person who sells fake, modified, or fraudulently obtained insurance policies. They may take a real policy and alter the details, or create entirely fake documents. Victims believe they are insured until they need to file a claim.

How do I check if my insurance is real?

Contact the insurance company directly using their official phone number (not one provided by the agent). Provide your policy number and verify your coverage details, effective dates, and premium amounts.

What should I do after a natural disaster to avoid scams?

Only work with contractors and adjusters sent by your insurance company. Verify identities through your insurer. Never pay upfront fees for claims assistance. Document all damage with photos before any work begins.

Insurance Scams: Spot Fake Policies & Insurance Fraud

Overview

Insurance scams take many forms, from ghost brokers selling fake or doctored insurance policies at below-market prices to scammers posing as insurance agents to collect personal information. Victims may believe they have coverage until they need to file a claim, only to discover their policy is invalid. These scams target health insurance, auto insurance, homeowners insurance, and life insurance.

How This Scam Works

Ghost brokers sell fake or modified legitimate insurance policies at discounted prices, often targeting people who find standard rates unaffordable.

Scammers impersonate insurance companies to collect personal information, including Social Security numbers and bank details, during fake application processes.

Fraudulent insurance comparison websites collect your data and sell it to marketers or identity thieves rather than providing actual quotes.

After natural disasters, scammers pose as insurance adjusters or contractors, collecting fees for work they never perform.

Warning Signs

⚠Insurance prices significantly below market rates

⚠Pressure to purchase immediately without time to review the policy

⚠Agents who cannot provide a valid license number

⚠Payment required only in cash, wire transfer, or prepaid cards

⚠Policy documents with errors, misspellings, or inconsistent formatting

⚠No way to verify the policy through the insurance company directly

Real Scam Examples

These are examples of messages used in this type of scam.

Social Media Ad

Full coverage auto insurance for just $29/month! No credit check, no down payment. All drivers accepted. Call now for an instant quote. [Unlicensed ghost broker]

Post-Disaster Call

Hello, I am an insurance adjuster sent by your insurance company to assess the storm damage. I can expedite your claim for a $500 processing fee. Cash or money order only.

How to Protect Yourself

1Verify the agent's license

Check the insurance agent or broker's license through your state's Department of Insurance website. All legitimate agents must be licensed.

2Contact the insurance company directly

Verify any policy by calling the insurance company's official number. Provide your policy number and confirm it is active and valid.

3Be wary of prices far below market rate

If insurance prices seem too good to be true, the policy may be fake, modified, or from an unlicensed company.

4Review policy documents carefully

Read the full policy before purchasing. Verify the insurance company's name, your coverage details, and contact information match legitimate records.

Frequently Asked Questions

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