This person contacts their victims either in person or over the internet and offers to arrange auto insurance coverage at a rate much lower than what the victim is currently paying or has been quoted. During the first part of the scam, the con artist charges his or her victim a fee for this so-called service. The scam artist them collects information about the victims driving history, along with other personal details that in some cases have included financial information. During the second part of this scam, the con artist gathers information and quotes on the victims behalf from actual auto insurance companies. Instead of accurately reporting this information to these companies, however, the scam artist lies to the insurance company about the victims personal information and/or driving history.
Source: http://www.examiner.com/article/car-insurance-scams