Reporter: Everyone loves a good deal. But when it comes to buying auto insurance, the lowest price may end up costing you more than you bargained for. An increasingly common scam involves the sale of cheap auto insurance to unsuspecting consumers. Joanne Fortin with the Financial Services Commission of Ontario:
Joanne: Fraud artists drawing potential customers by advertising rock bottom auto insurance prices, tricking consumers into paying for fake insurance coverage. It's not until you are involved in a car accident or stopped by the police and charged with driving without valid insurance, that some consumers discover they don't have real auto insurance. If you don't have valid auto insurance and are injured in an accident, you may not be entitled to receive certain accident benefits. More importantly, if you are found to be at fault for an accident causing injury or death to another person, you may be held personally responsible for his/her medical costs and other losses.
Reporter: When shopping for auto-insurance, Fortin says being aware of potential red flags can help to keep you from falling for a scam.
Joanne: Don't pay a referral fee. Licensed agents and brokers don't charge you fees. Don't pay you insurance premium through a transfer or money-wiring service. This is not a practice in the insurance industry. Check to make sure that you are dealing with a licensed insurance representative. A list of licensed insurance companies and agents is available on the Financial Services Commission of Ontario's website - www.fsco.gov.on.ca.
Reporter: To help consumers avoid auto-insurance scams, the Financial Services Commission of Ontario's website offers consumers helpful tips on how to avoid auto-insurance scams.
Joanne: People have to realize how much they could lose if they are in an accident and do not have valid automobile insurance. Remember, driving without valid auto-insurance, even unwittingly, is illegal. It is your responsibility to ensure that you have valid auto-insurance purchased from a licensed agent, broker or insurance company.
Reporter: If you suspect fraudulent activity in the purchase of auto-insurance, contact the police. For additional information on insurance, visit the website - www.fsco.gov.on.ca. Sherry Demitarco reporting.

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