Insurance Scams: How To Avoid Them

In the trades, from carpentry to plumbing, electrics to building, your day-to-day work is built on trust. Trust in your skills, trust in your clients, and trust in the tools of your trade. However, there is an unseen danger lurking in the background – insurance scams. These scams can not only disrupt your business but also cause significant financial and reputational damage.  

Here, we will explore how insurance scams work, what tools scammers use, and how you, as a tradesperson, can protect yourself. 

The Evolution of Insurance Scams 

Insurance scams have been around as long as insurance itself. However, with technological advancements, scammers have become more sophisticated. In 2024, the common tactics include: 

• Ghost Brokers: These are fraudsters who pose as legitimate insurance brokers, offering what seem to be legitimate policies at significantly lower prices. Once you pay, you receive fake documents, and only when you need to make a claim do you discover the policy is worthless.
• Phishing Scams: Scammers send emails, texts, or make phone calls pretending to be from reputable insurance companies. They use these communications to steal your personal and financial information. 
• Fake Websites: These websites look just like legitimate insurance company sites. They are designed to capture your personal information or steal your payment details. 

Ghost Brokers: A Closer Look 

Ghost brokers are perhaps the most dangerous scammers in the insurance world. They often target tradespeople because they know the necessity of having insurance for legal and practical reasons. Here's a typical scenario: 

• The Approach: You receive a call, email, or message on social media from someone claiming to be an insurance broker. They offer you an irresistible deal on your insurance premium. 
• The Sale: Enticed by the low price, you agree to the policy. The ghost broker might even provide you with official-looking documents. 
• The Aftermath: Everything seems fine until you need to make a claim or renew your policy. Then you discover that the insurance company has no record of your policy, leaving you unprotected and out of pocket. 

Real-life Example

Consider John, a self-employed plumber in Manchester. John received a call from a so-called insurance broker offering a policy that was £400 cheaper than his current one. Given the rising costs of materials and tools, John jumped at the chance to save some money. He paid the premium and received a policy document. Months later, when his van was broken into and his tools stolen, he found out the hard way that his policy was fake. He had no cover and faced a significant financial loss. 

Tools of the Trade for Scammers 

Scammers use a variety of tools to deceive tradespeople. Understanding these tools can help you recognise and avoid scams. 

• Spoofing Technology: This technology allows scammers to make phone calls and send emails that appear to come from legitimate insurance companies. The caller ID or email address might look genuine, but they are not. 
• Phishing Kits: These kits are readily available on the dark web and allow scammers to create realistic-looking emails and websites. They often mimic those of well-known insurance companies. 
• Social Engineering: Scammers use psychological manipulation to trick you into giving them your personal information. They might pose as a representative from your insurance company, using urgent language to prompt quick action. 

How to Avoid Insurance Scams 

To protect yourself and your business, here are some practical tips: 

1. Verify the Broker: Always verify the legitimacy of an insurance broker. Check their online registration with the Financial Conduct Authority (FCA) in the UK. A quick online search can reveal a lot about a broker's reputation. 
2. Check Contact Details: If you receive an unsolicited call or email, do not use the contact details provided in the message. Instead, use the contact information on the insurance company's official website. 
3. Look for Red Flags: Be wary of offers that seem too good to be true. High-pressure tactics, demands for immediate payment, and reluctance to provide detailed information are all red flags. 
4. Use Secure Payment Methods: Avoid paying for policies via bank transfer or cash. Use a credit card/ other secure payment methods that offer some protection against fraud. 
5. Review the Policy Documents: Always read the policy documents carefully. Ensure they match the terms discussed and that the insurance company's name and details are correct. 

Spotting Shady Emails, Texts, and Calls 

In 2024, scammers are using increasingly sophisticated methods to impersonate legitimate companies. Here's how to spot and avoid them: 

Shady Emails

• Check the Sender's Address: Often, scam emails come from addresses that look similar to a legitimate company but have slight variations. For example, instead of @insureco.co.uk, it might be @insur-co.co.uk. 
• Look for Spelling Mistakes & Grammatical Errors: Legitimate companies have professional communication standards. Poor grammar or spelling mistakes are common in scam emails. 
• Beware of Links and Attachments: Do not click on links or download any attachments from unknown or suspicious emails. Hover over links to see where they lead before clicking. 

Dodgy Texts

• Unexpected Messages: If you receive a text from an unknown number claiming to be your insurance company, be cautious. Verify the message by contacting the company directly using official contact details. 
• Urgent Language: Scammers often use urgent language to prompt immediate action, such as "Your policy will be cancelled if you do not respond within 24 hours." 

Shady Phone Calls

• Unexpected Calls: Be wary of unsolicited calls from people claiming to be from your insurance company. If in doubt, hang up and call the company back using the number on their official website. 
• Requests for Personal Information: Legitimate companies will not ask for sensitive information over the phone unexpectedly. Do not provide personal or financial information unless you are sure of the caller's identity. 

Frequently Asked Questions (FAQ) on Insurance Scams 

Q1: How can I verify if an insurance broker is legitimate? 

Check if the broker is registered with the Financial Conduct Authority (FCA). You can do this by checking the FCA website and searching for the broker's name. 

Q2: What should I do if I suspect I am dealing with a ghost broker? 

Do not provide any personal or financial information. Report your suspicion to Action Fraud, the UK's national reporting centre for fraud and cybercrime. 

Q3: Can I get my money back if I have been scammed? 

If you've paid with a credit card, contact your card provider immediately. They may be able to help you recover your money. Report the scam to the police and Action Fraud. 

Q4: How do I report a phishing email or text? 

Forward phishing emails to the National Cyber Security Centre at report@phishing.gov.uk. For phishing texts, forward them to 7726, which is free of charge. 

Q5: How can I protect my business from insurance scams? 

Stay informed about common scams, educate your employees, and use secure payment methods. Always verify the legitimacy of brokers and insurance companies. 

Why Choose Rhino Trade Insurance? 

At Rhino Trade Insurance, we understand the unique challenges that tradespeople face. We are committed to giving you comprehensive and affordable insurance policies tailored to the needs of tradesmen and women across the UK. Our policies cover lots of trades and offer robust protection, ensuring you can focus on what you do best – your trade. 

We pride ourselves on our transparency, reliability, and customer-focused approach. As a trusted name in the industry, we are fully regulated by the FCA, and our team is ready six days a week to assist you with any queries or concerns. Whether you need Public Liability Insurance, Tools Insurance, or any other type of cover, Rhino Trade Insurance is here to safeguard your business. 

On that note... 

Insurance scams are a real and growing threat in 2024, but if you keep your wits about you, you can protect yourself and your business. Always verify the legitimacy of insurance brokers, watch out for red flags, and never hesitate to report suspicious activity.  

At Rhino Trade Insurance, we are dedicated to supporting tradespeople by providing trustworthy and affordable insurance solutions. Stay safe, stay insured, and keep building your success. Call us today for more info on your next policy: 0116 243 7904.