1. Being lowballed. This is where you do your research and hunt around for the best car insurance deal you can find. One company comes in way cheaper than the rest so you decide to go with them. Then 2 months later, once you've signed up and paid your money, you get a letter saying that there was a 'company rate error' and your premium is actually a couple of hundred dollars higher than the price you were quoted. While it can be difficult to spot a company that practises lowballing, one clue is if they offer film processing vouchers or free coupons. Legitimate and ethical companies shouldn't need to resort to those sort of tactics to get your business.



2. Buying from a Phony Agent. Just because an agent has a storefront doesn't automatically mean that they are a real agent representing a real insurance company. A proof-of-insurance card can be forged just as easily as letterhead, business cards and signage can. One clue that things may not be as they seem is if the agent issues their own insurance. They can't legitimately do that because they are 'agents' which means that they represent an insurance company and aren't an auto insurance company in their own right.

3. Going through a middleman who represents a Phony Company. While the agent may seem legitimate, you need to do your homework on the company they claim to represent.

4. Alliance between an auto insurance company and repairer that benefits them but not the insurer. For example, a car insurance company may recommend a repairer that inflates the worth of the car and then charges a high amount to repair the car. In this instance, the car should probably be written off as totalled but the repairer doesn't do this because it will lose business and the insurance company will lose on deductibles.

5. Car insurance quote in exchange for personal information. If you receive a phone call from an insurance agent offering a free quote on car insurance in return for you providing personal information, don't be fooled. Providing information in this instance leaves you vulnerable to having your identity stolen. The only information required for a car insurance quote should be information about the car. Of course, eventually they will need more information than that to proceed with organizing auto insurance cover but by then you should be feeling comfortable enough to be prepared to provide those details.

Just knowing what to look out for can save you time, money and unnecessary frustration. Remember, buy beware!