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How to detect and Avoid Car Insurance Frauds in India

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Vivek is a resident of Delhi and one of his most prized possession is the car that he has bought recently. Although it was a used car that was not in its prime condition, he was proud of having purchased a vehicle. When it came to buying the insurance he got very confused and started looking for a good deal online or through his friends. Soon he got a call from an insurance salesman from a very well-known insurance brand. The salesman offered a very attractive plan and asked him to transfer some money to a personal UPI ID sent to him through an SMS. Once he transferred the money he was also sent some policy documents via email. Later when he met with an accident he tried to use the insurance for repairing his car, and he found out that the insurance policy is completely fake.

When we buy a car, we also take insurance. What we need to understand is that the car insurance industry has many agents and insurers, and also involves quite a lot of money. And an industry where there is a lot of money, chances of fraudulence are also involved. Car insurance fraud in India is concerning for both the insurance companies as well as the policyholders. Many times it has been found that policyholders find out that they have bought a fake insurance policy after submitting a claim against their policy.

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Therefore, here are some of the ways that can help you to identify and avoid car insurance scams.

What is car insurance fraud?

Car insurance scams can be defined as any type of fraud that has been committed by using vehicle insurance. This kind of fraud is mostly committed by fake insurance companies or agents.

Types of car insurance frauds

Some of the top types of insurance fraud in India are mentioned herein below:

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1. Insurance fraud against the insurance companies

Insurance companies sometimes become the victims of such fraud cases. Various methods are tried by the fraudsters to trick the insurance providers when it comes to settling claims. Techniques like staged accidents, exaggerated damage, and increased claims to get the deductible are used.

Fraud against insurers includes: Exaggerating damages, Staged accidents, Claims fraud, Application fraud, Forgery, Eligibility fraud, Internal or external fraud (employees or agents).

2. Insurance fraud against the policyholders

As we talk about car insurance fraud, we need to know that not only the insurance companies fall prey to such cases but also the policyholders are targeted by the fraudsters. This mostly is done by fake insurance agents.

Fraud against policyholders includes: Fake motor insurance policies, Unrealistic benefits, and features, Fake payment beneficiaries, and Spurious calls.

How to avoid car insurance fraud cases in India

Let us discuss some of the tips that you can use to avoid a fake insurance provider or agent while purchasing a car insurance policy as mentioned below:-

  • Purchase directly from the insurance company: You must get in touch with an insurance company that follows the direct-to-customer model. You can also look for insurance companies that completely work on an online platform. This will enable you to buy motor insurance directly from the company, and avoid chances of fraudulence. While doing so, you need to ensure that the insurance company is reputable and is a licensed insurer. If the company is not registered with the IRDAI, you might even have to compromise later.
  • Get a receipt of the insurance premium: Each time you pay the premium for car insurance, you must get a receipt for the same. It is even wiser to get receipts for all your payments. In case, you end up finding the policy is fake, the receipt can be used as proof to fight against the fraudulent insurance company legally.
  • Go through the terms and conditions: The majority of the people do not read the terms and conditions of any document. However, when you read the terms and conditions of a policy, you will have clarity on the features and benefits of the policy. Some of the most significant parts of vehicle insurance are Insured Declared Value, No Claim Bonus, and deductibles. Therefore, you must spare some time to read the terms and conditions carefully.
  • Try to pay by cheque/credit card/online: When you use a cheque or credit card or even net banking to pay the premium, you pay it directly to the insurer, and not to any middleman. When you use these modes, there will be no confusion and risk.
  • Verify through the QR code: Going by the guidelines that have been issued by the Insurance Regulatory and Development Authority of India (IRDAI), each insurance company must have a QR code. You must scan the code to check if the policy is genuine. The QR code of a policy consists of the status as well as the details of the insurance policy that can help you to verify the authenticity of the policy and the insurance company.
  • Not to sign on a blank form: While buying a policy, you must not sign on a blank form or a cheque. You must fill out the form on your own. If you sign on a blank form or a cheque, it can be used for several things and you have to pay heavily for it.
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Get Resolutions for Insurance Complaints

Everyone needs to be very careful when buying auto insurance and following these tips you can minimize the risk of being defrauded. If you suspect that you are a victim of an auto insurance fraud, you can consult Insurance Samadhaan to clarify your doubts and decide on the best course of action.

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