Toronto - With news of arrest in Toronto of eight people involved in an insurance scam, Canada’s home, car and business insurers are reminding consumers that there are still many unscrupulous people out there trying to trick them into buying phony auto insurance coverage.

Here’s what consumers should know to avoid being a victim of an insurance scam:

If it sounds too good to be true, it likely is Auto insurance in Ontario averages about $1278 per vehicle according to recent industry information.

“If you have a clean driving record and you’re being offered insurance at a dramatically reduced price, you could be dealing with a scammer,” says Mark Yakabuski, Vice-President, Federal Affairs and Ontario, Insurance Bureau of Canada. Ask questions and get a number of price quotations. A low-ball price likely isn’t the deal it’s cracked up to be. And, it won’t seem like such a deal if you find out later that you have no insurance coverage.

Check the source: Licensed agents and registered brokers

“Only licensed companies and representatives can sell insurance in Ontario,” says Yakabuski. “If you have doubts about the person claiming to be an insurance salesperson, find out if they are legitimate. Check with the Financial Services Commission of Ontario (for agents) or the Registered Insurance Brokers of Ontario (for brokers) to verify their status. If the so-called insurance salespersons offering you a great deal on car insurance insists on meeting you at a coffee shop, you have to wonder if they are really legitimate.

Know someone who’s driving without insurance? Report insurance crime!

“Driving without insurance is against the law. It’s also unfair to law-abiding citizens who pay insurance premiums so that claims can get paid. If you’re approached by someone selling phony insurance or if you suspect someone of driving without insurance, don’t just get mad, get active. Pick up the phone and call 1-877-IBC-TIPS or go to IBC.ca to submit a confidential tip to IBC investigative services,” Yakabuski adds.

Need more info or advice? Consumer information is available at IBC

Insurance Bureau of Canada has knowledgeable consumer information officers available to answer your insurance questions at 1-800-289-2881 or 416 362-2031 (local Toronto), Monday to Friday, 8 am to 6 pm.

Insurance Bureau of Canada

Insurance Bureau of Canada is the national trade association of the private property and casualty insurance industry. It represents more than 90% of the non-government home, car and business insurance in Canada. To view news releases and information, visit the media section of IBC’s website at www.ibc.ca.

What are your options in the world of drag racing?

Are race car drivers the best drivers in the world—or the worst? How about weekend racers or those who just want to experience the open road—on a track—at 100 miles per hour.

An Unexpected Use
According to most car insurance companies, they’re the worst drivers. Or at least, the crashes are the worst and that’s the reason your personal car insurance policy will not provide coverage at high-performance driving schools or race tracks. Participating in “track days” with your own car is simply too risky a practice, according to most auto insurance companies, because it’s rare that the accidents are minor. In fact, a high-speed crash will usually result in a total loss of the car. Driving well above the street-legal speed limit was simply not what your insurance company expected when you said you drive your car “primarily for pleasure”—and your rates are based on expected driving—not racing. Any technology installed in your vehicle to track mileage-based insurance may also take into account not only your speed but any sharp acceleration and braking, which would very quickly uncover any secret street racing you might be enjoying in your spare time!

To Race or not to Race
In the past, most car insurance policies would not cover damage that resulted from drag-racing, organized racing or a timed event. But high-performance driving schools often do not time the runs and they marketed their events as driver’s training—not racing. So, those events would technically have been covered by your car insurance policy. However, in the last few years, most auto insurance companies started to exclude coverage for driving at any site that’s designed for racing, whether or not the events are timed, which leaves even these safety-oriented driving school opportunities at the side of the road. Drivers who had been racing for years using their own cars are now facing a dilemma—leave their car at home or take a chance that nothing will happen. To minimize their potential losses, some drivers have even stepped down from racing an expensive sports cars to a driving a “beater.”

Coverage Options
Since car insurance policies vary by state, there may be states where coverage is still available on your own policy, but it’s wise to check with your company first. Many tracks offer single event coverage or a policy that will cover multiple events during a year. An agent or company that specializes in auto insurance for race events can provide you with quotes before you schedule a track day or enroll in a driving school.

The insurance company will pay the damages, up to a limit, which is dependant on your policy. The lowest that this limit can be varies by your state/province, and you must at least have this as your minimum liability coverage. There is no minimum amount of comprehensive or collision coverage that is required.

In most cases this limit may be too small to cover all damages that could conceivably occur. If the damages exceed your liability amount, then you are personally responsible to pay the remainder of this amount!

It is a good idea, to increase your maximum liability from the government set minimum. This may raise your premium, but the benefit of not having to worry about paying any damages if they exceed your minimum far outweigh the negative.

Liability coverage will cover medical expenses and property damage to other motorists, and will not cover injuries to you. To have your medical expenses covered you will need some form of medical insurance.

Check list of all the government set minimum liability coverage’s for Canada and the United States, along with some information on the maximum amount of pay-outs for certain damages here.

1) Auto Insurance Comprehensive Coverage

2) Auto Insurance Collision Coverage

3) Auto Insurance Liability Coverage

These vary based on what they protect and cost.

Comprehensive Coverage

Auto Insurance Comprehensive Coverage covers damages to your car that are not caused by other motorists. These damages include, fire, theft (of the whole car, or parts of it i.e. Stereo, Rims), damage from acts of God, such as ice storms, tornados, hail and floods. Lastly it covers if you hit a deer, or if your vehicle gets vandalized.

This type of coverage is optional and should only be purchased if your vehicle is worth more then $1000. Auto insurance comprehensive coverage does not raise the premium very much, and you can choose deductible amounts of $250, $500, and $1000. It’s best to go with the $250 deductible, as the higher deductibles, don’t lower your premium enough to be worthwhile.

Collision Coverage

Collision coverage covers your own car, when you encounter physical damage to it, as a result of a collision. So if you crash into a light post, or hit another car, this insurance will pay to fix YOUR car.

Again this coverage is optional and the deductibles range from $250, $500, and $1000, and if your car is worth more then $4000, I urge you to get this coverage, so if you are ever involved in a accident, you won’t be left with a large bill to fix your car.

Liability Coverage

Liability coverage is different from comprehensive and collision coverage, in that you are required by law to have a minimum amount in most states and provinces. Whenever you drive a car, you are capable of causing damage, to property or to other persons. Since most people don’t have the money to cover these damages, governments require drivers to have liability insurance that will cover any losses that you cause on anyone or their property.

While you are driving, if you cause an accident, your insurance company will pay for anything you damage and for the medical bills for anyone you injure. They will cover the expenses, up to a maximum limit that you agree for when you purchase the insurance policy. This limit can be anywhere from $50,000 to $1 million, depending on where you live. The amount of maximum liability coverage, will affect the amount you pay per year (your premium), with a smaller maximum liability, leading to a smaller premium.

However, it is not smart to save a couple dollars here by skimping on your maximum liability coverage, as any damages over your limit, will be your responsibility to pay. That means if you only have $50,000 liability, and you cause $60,000 worth of damage and medical bills, you will be on the hook for the other $10,000!!!

It is best to have at least $500,000 or $1,000,000 liability, that way you will surely be able to cover all damages and expenses you cause.

How many people have the money to pay for the results of car accidents? Not many. If the accident is caused by you, you would be solely responsible for all the damages caused. These include, the other motorist’s car, the other motorist’s personal injuries, other people’s injuries that were involved and any other damage caused. This total could add up to tens, or even hundreds of thousands of dollars!

Without insurance, you would be responsible for paying this bill, and may have to work many years in order to pay off this debt. Even minor accidents can produce thousands of dollars in property damage and medical expenses! Having insurance protects you against this expense, and I would rather pay $2000 a year for insurance then risk getting into an accident and having to pay tens of thousands of dollars, to fix the other motorists car, and many more thousands in personal injury!

If you are ever involved in an accident and need help with the insurance claim check out Insurance Claim Contractor Directory: Find a Qualified Insurance Claim Service Provider in Your LocalArea!