Will you believe it if we say that the insurance industry once bore a loss of INR 30,000 crores due to fake car insurance policies?
Yes, the car insurance policy you bought might be a fake one and the premium you paid might have gone to waste. Through this article, we will help you understand the ways to avoid buying a fake car insurance policy.
What is a Fake Car Insurance Policy?
These refer to policies that unauthorized companies sell. Such companies do not even exist as legitimate companies and con people to pay money in return for insurance services. With the right conversational skills and technical know-how of insurance in general, anyone can do this forgery. In fact, anyone with a printer at home can create fake policy papers too.
Every year, thousands of people end up buying a fake insurance policy, and this happens more in tier 2 and tier 3 markets. Therefore, it is imperative to know how to avoid such a situation in your life.
Importance of Having a Valid Car Insurance Policy
The importance of having a valid car insurance policy comes into the picture when you have to make a big claim settlement. When it is a small settlement of less than INR 1000, then it might not feel very harmful, but when the bill goes into tens of thousands or even into lakhs, this is when you feel the financial burn. You will have to pay everything out of your own pocket and may even end up in a lawsuit for driving a vehicle without insurance. Just like what happened with Suresh, when he got caught without a valid car insurance policy as his car collided with another car. He not only paid the compensation to third-party from his pocket but also paid a heavy fine of INR 2,000 for not following the law. Suresh was carrying an invalid car insurance policy hence his insurance company wasn't liable to compensate for the same, which means he had to bear all the expenses of not only his own damaged car insurance but also for the third-party.
How to Avoid Buying Fake Car Insurance Policies?
1. Avoid paying cash
You have to be careful about the payment mode of your premiums. If the service provider asks you to pay cash, then you should get suspicious because most authorised companies won’t do such a thing. The best way to make the payment is via an online payment gateway, which not only makes it a secure and official transfer but also makes it easy for you. Another way to make the payment would be to pay through a cheque or DD. If you are buying insurance offline, then this would be the best step as this too has proper proof of you making the payment. This helps you later on if you get involved in a legal battle.
2. Buy the insurance only from the registered company, licensed brokers, and agents
The next thing is to check the authenticity of the insurance company you are buying from. You might be approached by insurance brokers but make sure that you ask for their official IDs and practicing license. This will give you an idea about the kind of professionals you are dealing with.
3. Purchase Insurance online
One of the best ways to avoid buying a car insurance policy is to buy it online. This way, you can buy the policy from the official website of the insurance company. Moreover, what makes this the ideal option is that you get to compare different policies on the internet before making the final decision. With no paperwork required and an easy and secure payment option, going online is definitely the way to go ahead.
4. Use a QR code to verify the authenticity
To eradicate fake insurance policies from the market, the IRDAI (Insurance Regulatory and Development Authority of India) came up with a simple solution back in 2015. They created a system that generates a QR code for each policy in the market. As soon as you scan it through a reliable code scanner, you will be taken to a new web page that shows all the details of your policy. If you are not given a QR code for your policy or the one given does not work, then it pretty much means that you have bought a fake policy.
5. Collect all the receipts
It is very crucial to collect all the receipts of the payments you have made. If you make your payments offline, then you should keep all the receipts safely. In the case of online payment, you must take a printout of the confirmation of payment and keep both the hard copy and the soft copy intact. If the insurance company you buy from does not provide any receipts then it can be considered to be a fake.
6. Read the final papers properly
Before signing the deal and making the payment of the premium, it is very crucial to ensure that you have gone through the final insurance papers thoroughly. All the conditions should be mentioned in that and if you are not clear, you should be very clear about them and then sign the deal. The situations covered in the policy, exclusions, NCB clauses, mention of add-ons you have included, IDV (Insured Declared Value), price of the premium, and policy term are the major pieces of information that should be mentioned in the papers. If you are buying online, then make sure to get in touch with the customer support system.
7. Check the status on the Vahan NIC website for verification:
Another way to check whether you have bought a legitimate policy is by checking it on the Vahan NIC website. You can simply put the registration number and check for all the digitized information related to your vehicle, including your RC status, challans, insurance details, and more. If it is not a valid insurance company that has been accredited by IRDAI, then your information will not be displayed in the portal. This should give you a fair idea of how genuine your policy is.
One cannot overstate the importance of having a valid car insurance policy. No one would want to be in a position where he/she is duped by fake insurance service providers and must pay for the damages during an accident. Therefore, always buy an insurance policy from a reliable source after comparing different options online!