What is a Ghost Broker?
A ghost broker is not a legitimate insurance intermediary or agent. Instead, they are fraudulent individuals who pose as insurance brokers, offering policies to unsuspecting customers that may appear genuine at first glance. These pseudo-brokers typically operate online and prey on the vulnerability of people seeking affordable insurance coverage.
The Issues Ghost Brokers Cause in the Irish Insurance Market
- Fraudulent Policies: Ghost brokers create fictitious insurance policies or modify existing ones to make them appear valid. This means that victims may believe they have insurance coverage when, in reality, they do not.
- Increased Costs: Ghost brokers often sell policies at a lower price, enticing customers with the promise of saving money. However, they often charge substantial fees for their “services,” increasing the overall cost for the consumer.
- Legal Consequences: Purchasing insurance from a ghost broker may lead to legal issues for the customer. In Ireland, driving without valid insurance is illegal, and if caught, individuals may face penalties, including fines and even driving bans.
- No Support in Claims: When a policyholder tries to make a claim, they may discover that their policy is invalid, leaving them with no insurance protection in their time of need.
- As well as having no cover, you may also have your policy cancelled by the insurance company the ghost broker placed you with. This forced cancellation will then have to be disclosed to any insurer going forward, making it even more difficult to get insurance.
How to Avoid Ghost Brokers
- Verify the Broker: Always check the authenticity of an insurance broker. Genuine insurance brokers in Ireland must be registered with the Central Bank of Ireland. You can verify their registration by visiting the Central Bank’s website.
- Beware of Unbelievable Offers: If an insurance offer seems too good to be true, it probably is. Ghost brokers often lure customers with unrealistically low prices. Compare quotes from multiple legitimate insurance providers to get a better understanding of the market rates.
- Check Policy Documents: Examine policy documents carefully. Ensure that all the details are accurate and match your requirements. Be cautious of any discrepancies. Check your proposal form/ statement of fact and make sure the information is accurate.
- Ask Questions: Don’t hesitate to ask your insurance broker questions about the policy, coverage, and any doubts you may have. Legitimate brokers will provide transparent and comprehensive information.
- Use Reputable Websites: When shopping for insurance online, only use reputable insurance comparison websites, insurer websites, or the official websites of registered insurance brokers. Check if the broker has a physical office somewhere rather than operating fully online.
- Report Suspected Fraud: If you come across a suspicious insurance broker or suspect fraudulent activity, report it to the Gardaí and the Central Bank of Ireland immediately.
Ghost brokers are a shadowy presence in the Irish insurance market, deceiving customers and causing significant problems. To protect yourself from their deceitful practices, it is crucial to exercise caution, verify the legitimacy of brokers, and ask questions when purchasing insurance. By following these steps, you can ensure that your insurance coverage is genuine, reliable, and offers the protection you need in your time of need and you won’t receive an expected fright if you need to claim off your policy.