The growing number of insurance fraud cases has become a concern for insurance companies and policyholders in India. According to the Indian Forensic Centre for Studies report, the losses caused to the insurance industry due to frauds are estimated to be over Rs.30,000 crore every year. While one may think that insurance frauds are generally committed by making false claims, fake insurance policies are one of the leading types of insurance fraud in India. Did you know that an insurance policy purchased by you can be fake? Yes, it happens when you do not research well or take enough precaution while buying an insurance policy. Sadly, many policyholders realise that they have a fake insurance policy only when they make a claim. After all, what is a insurance policy till you make a claim? It is just a piece of paper with a seal and a signature.
What is a fake insurance policy?
Fake insurance policies are those policies that are sold by unauthorised insurance companies with an intention to make money without providing the insurance coverage. It is nothing but a fake insurance policy from a fraudulent company which does not even exist. If currency notes can be duplicated in India, anything is possible. Anyone with a basic printer at home can print out a fake insurance agreement. Every year, there are thousands of policyholders who fall for this scam. If policyholders give a lot of thought and research well before applying for an insurance, they won’t fall for fake insurance policies. Owning a fake insurance policy can give you the shock of your life when your car is damaged and you need to make a big claim. The situation can get worse if you have large third-party liabilities to pay. You need to be extremely careful to avoid such an awful situation.
Ways to spot a fake insurance policy
- Make sure you contact your insurer directly: Any agent or dealer can print a fake insurance policy and hand it over to you. Irrespective of where you got your insurance policy from, always contact your insurer directly and confirm your insurance policy information. You can write an email to the insurance company or call their customer care number and talk to one of their representatives.
- Gather your receipts: Ask for a receipt for every payment. Make it a habit to request for a valid receipt for all the premiums you pay. Should you later find that your insurance policy is fake later, you can use these receipts to fight the legal battle against the fraudulent insurance provider.
- QR code: Insurance Regulatory and Development Authority (IRDA) has made a QR code mandatory for every insurance policy that is sold from December 2015 onwards. The QR code helps one to verify the authenticity of the insurance policy. All you have to do is scan the image of the QR code using a QR reading app on your smartphone. As soon as you scan the QR code, you will see the status and the details of your insurance policy in a new web page.
- Read your insurance policy: Most of us do not give importance to what is being printed on the insurance policy. Please take some time to read the fine print of your insurance policy. Once you have received the car insurance policy, make sure you have checked the important information printed on it like the Insured Declared Value, No-claim Bonus, and any other deductibles. You may think that these are minor things that don’t need to be checked but these are the very things that will matter when you file a claim.
- Buy directly from the insurance company: To avoid fake insurance policies, make it a point to buy insurance from the insurance company directly. Eliminating middlemen can help you own a valid insurance policy. Also, make sure you choose a reputable insurance company as small insurance companies may compromise on your insurance policy but popular companies can’t afford to do that.
- Consider paying online/by cheque/credit card: By paying online or paying by cheque or credit card, you send the payment directly to the insurance company. This will act as an additional proof in case you need it later.
To sum up, it is always advisable to check the validity of your insurance policy. If you are planning to buy a new insurance policy, visit reliable websites like BankBazaar to compare a wide range of insurance options. This website not only allows you to compare various financial products but also lets you apply for them instantly.
GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017