How do I spot a fake insurance policy?

Ghost broking is the most common form of insurance fraud affecting consumers directly. A fake broker — often operating through social media or classified ads — offers unusually cheap car, travel, or home insurance. They either issue a completely forged policy document, buy a genuine policy but immediately cancel it after pocketing your payment, or enter false information to get a cheap genuine quote they then mark up.

The consequence becomes apparent when you make a claim or are stopped by police and your policy is found to be invalid. A ghost-brokered car insurance policy means you have been driving uninsured even though you believed yourself to be covered. For travel insurance, a fake policy means your medical costs abroad are not covered.

Authorisation is the key check. In the UK, all insurance brokers must be authorised by the FCA — verify at register.fca.org.uk. For motor insurance specifically, verify your policy on the Motor Insurers' Bureau database (askMID.com) after purchase: it should appear within 48 hours. If it is not on there, something is wrong. In the US, check your state insurance department's website to verify insurer licensing.

Prices well below the market average and pressure to pay in cash or by bank transfer are consistent red flags. Legitimate insurers accept card payment and provide policy documents from a named, authorised entity.