Aviva Canada details recent alleged insurance scam

Aviva Canada has released details of a recent insurance scam, warning consumers to make sure they’re using someone licensed when purchasing their coverage, even if that person has been recommended through a friend.

In April, a Mississauga, Ont. man was charged with three counts of fraud under $5,000, uttering a forged document and making a false document, according to Aviva.

The unlicensed seller allegedly  took cash from a victim to set up an auto insurance policy, did not secure coverage and kept the money, leaving the victim out thousands of dollars and driving without coverage, Aviva said.

A woman alerted Aviva and the York Regional Police to the alleged scam after a friend referred her to the man for cheaper insurance.

It is alleged that he attended her home, provided her with a temporary insurance card, and collected $3,125 worth of premium in cash. The woman became wary when she never received a permanent insurance card, Aviva said.

After following up with the man’s network and paying an additional $1,660 in cash, an Aviva policy was purchased on the victim’s behalf through a licensed insurance broker.

By June, Aviva Canada had only received two months of premium, so the insured was sent a notice that her policy was going to be cancelled for non-payment. The $4,785 in cash the victim provided to the man is unaccounted for, according to Aviva.

“It is important to use a licensed broker when purchasing insurance. Even if a friend refers you to someone who says they sell insurance, make sure that they are legitimate,” Steve Cohen, senior vice president of Personal Lines Pricing & Underwriting for Aviva Canada noted in a statement.

“Too often, consumers are taken advantage of by opportunistic individuals who claim that they’re providing insurance, when in fact, they are pocketing the money for themselves.”

York Regional Police and Aviva Canada worked together to investigate the alleged fraud. The man is scheduled to appear in a Newmarket, Ont. court on July 10.

“This is just one example of an increasing number of scams involving the sale of insurance. Criminals are also preying on innocent victims through classified websites like Craigslist and Kijiji, or are exploiting referrals through auto repair shops and car dealerships,” Cohen added.