Everyone knows that the car insurance industry is an extensive and complex network of agents, policyholders, and many middlemen involving substantial financial transactions. There tends to be a lot of fraud whenever a massive amount of money is involved.
Fraud happens when a claimant or policyholder attempts to obtain the advantages of an insurance claim to which they are not entitled by providing fake information. Car insurance fraud in India can happen from the policyholder or the insurance company.
The main feature of car insurance fraud are:
- The insurance is claimed under misrepresentation or deception.
- Claims made for financial gains.
- The accident was caused purposefully or intentionally.
- Other unlawful activities.
Car Insurance fraud happens when the insured person purposefully plans to create a theft, injury, or loss. Other scams happen when the policyholders overestimate the claims of an insurance policy.
Types of Car Insurance Frauds
Insurance Fraud from an Insurance Company
The most common type of fraud is when a fraudulent party tries to sell insurance or any other product to an existing policyholder or a new customer. They may sell a bogus or fake insurance policy or try to siphon off the money by claiming the policyholder has to pay for their policy, renew car insurance online using a third-party link, or buy new insurance or some add-on to the policy.
Insurance Fraud from the Policyholder’s Side
This fraud is made against the car insurance company by the insured person. A policyholder provides false information or data while buying a new policy or claiming the insurance amount. Some instances of car insurance fraud in India from the policyholder's side are:
Overestimating the Damages
The car insurance policyholder may exaggerate or inflate the damages caused by accidents, theft, or natural disasters to receive the insured claim. At times, the repair amount or damages is not the same as the amount stated by the policyholder. If the insurance provider finds this out, it can lead to a fine or cancellation of the insurance policy.
Planned or Staged Accidents
A sizeable amount of accidental claims made by the policyholders are staged or fraudulent. The accidents are planned so that inaccurate claims can be made to the insurance company. Insurance providers have third-party surveyors and investigate any claim request to protect against any staged car insurance claim.
Padding Insurance Claims
These car insurance claims are inflated by providing faulty or false pieces of evidence of an accident, theft, or damages to get the maximum money from an insurance provider. It is often difficult to recognize such frauds as the insured has created such instances which might look accurate and true.
Tips to Avoid Car Insurance Frauds
To safeguard yourself against any car insurance fraud, it is always recommended to be aware of all the details of insurance policies and features. Below are a few tips that can help you avoid car insurance fraud.
Maintain the Policy Documents
It is always advisable to keep all the documents related to the insurance policy handy and safe. The insured should always ensure that it gets the insurance payment receipt and all the essential documents, which can be used as proof in case of insurance fraud.
Read more - Best Ways to Eliminate Car Insurance Fraud
Make Payments Online through Verified Sources to the Insurance Provider Only
Make sure to buy car insurance online using an authentic payment gateway for premium payments. This ensures that the amount gets transferred directly to the insurance provider and not to a third party or the insurance agent. Check the payment website and read all the information carefully before providing any card or online payment details.
Do Not Sign Blank Forms or Cheques
Make sure you do not sign any insurance-related blank forms or provide a blank cheque to the insurance agent. Also, the forms should be signed only after reading and understanding all terms and conditions.
Check the Policy Status via Qr Code
Every insurance service provider must provide a QR code system for every policy sold. The policyholder can scan the QR code and check the status, details, authenticity, type of insurance plan chosen, etc. The policyholder can cross-check the details and verify the plan's validity and authenticity.
Buy a Policy from the Authentic Insurance Service Provider
You can pay for the car insurance policy online on reliable platforms such as Paytm Insurance, which does not require any agent or middlemen.
While buying any car insurance policy online, check all the details and make payments via the online portal only, which decreases the chances of fraud. Buying an insurance policy from a licensed service provider is always a good and reliable idea.
Read the Terms and Conditions Before Signing the Deal
People generally do not read or pay attention to the terms and conditions of the insurance provider. Reading terms and conditions beforehand makes the insurer understand the benefits, features, and details of the insurance policy and claim process. If some points in the terms and conditions section are confusing or erroneous, they can be corrected then and there.
Read more - Is Your Car Insurance Policy Genuine? How to Check
Conclusion
Every insured should cross-check every minute detail of the car insurance policy to avoid being tricked into buying a fraudulent policy. It is always recommended to transact and evaluate insurance-related details on verified websites where the information is accurate. You can compare car insurance on these platforms, select the ideal one for your needs, and even speak to the experts to get recommendations and complete details about the policy.
Read more - Why You Should Never Lie to Your Car Insurance Company?
