Have any of you ever bought insurance via the internet? How about in a pub or restaurant, at a motorway services or even at your front door?

I try not to go on too much about the perils of buying insurance via the internet but there is a 25% failure rate for claims across all types of internet policies and, really, would any business be happy if a quarter of their work proved to be defective?

There is also a relatively new but growing problem with “ghost brokers”. Typically, the ghost broker sets up a reasonable replica of a broking website, invests in .pdf to Word software and away they go. It is thought that at least 100,000 ghost policies have been sold to hapless consumers over the past 12 months. That’s 100,000 vehicles sharing the roads with you and I without being actually insured.

Typical of ghost brokers are these three, recently jailed for their activities because they weren’t quite clever enough or just got too greedy. The more competent ones are still out there!

  • Mr K: Jailed for 2 years for obtaining over £65,000 over a period of 2 years. Volvo and Ford had an arrangement with RSA to provide 7 days free insurance to buyers. Mr K would call RSA pretending to have bought a car; change the documents to look like an annual one and sell them on Gumtree. Having used the same mobile number on over 50 applications, RSA finally spotted there was a problem.
  • Mr B: Jailed for 3 years after selling over 600 non-existent policies and pocketing £550,000. He re-sold policies from 1st Central at more than the correct premium plus admin charges. Apart from his website, he sold policies in pubs, restaurants and at motorway services. He used the same email address in over 100 applications which alerted 1st Central.
  • Mr I: Jailed for 15 months after selling 41 ghost policies for £45,000. Much the same technique as Mr B but using 5 different insurance companies. He sold his policies door-to-door in Yorkshire but made the mistake of door-stepping a genuine local broker.

Really worrying is the fact that people were and are willing to buy insurance on Gumtree, in pubs or at their front door and, in many cases to pay more than they would have done for a genuine policy. These people share our roads!

These ghost “policies” are completely invalid. They cannot be used to obtain road tax. The vehicle will not be registered on the Motor Insurance Database so that makes a roadside stop by police using ANPR quite likely. So, that’s 6 points on your licence, a minimum £200 fine and seizure of the vehicle until you pay a lot of money to get it back. Then, having learned one lesson, you have to buy genuine insurance but with a ‘no insurance’ conviction to declare. Guess what that does to your premium? You don’t want to know, really you don’t!

However, that is glossing over the very real risk of being involved in an accident and losing everything you have ever worked for in paying compensation to an injured party.

Insurance is far too important to leave in the hands of anyone other than an established professional.