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Nov 25, 2022

How to Stay Protected Against Insurance Frauds?

This year the International Fraud Awareness Week is from November 14 to 21. A week that focuses on fraud detection and prevention. We are in the middle of a global crisis and trying our level best to adapt to the new normal. The internet banking penetration has increased since the outbreak of COVID-19. This somewhere has also led to incidences and attempts to digital frauds. Hence, it becomes important to take steps that minimize the impact of fraud. Moreover, promote anti-fraud awareness and education. The Fraud Awareness Week is an apt time to take a step further and be an anti-fraud professional.

What You Can Do?

It is important to be aware of what's happening. When you are aware, you are a more conscious person and can easily have productive conversations. It helps to figure out if anything goes wrong. Have conversations around fraud prevention. It could be with your peers, coworkers, family members, and so forth. Fraud prevention is important for society as a whole. In this article let us discuss insurance frauds.

How Does Fraud Affect?

Frauds not only affect the common people but also the insurance industry. Since the commencement of insurance as a commercial enterprise, insurance fraud has existed. It takes different forms and can occur in any insurance domain.  Insurance fraud could be either soft or hard.

Difference Between Soft Fraud and Hard Fraud

Soft frauds are more common and it includes exaggeration of the legitimate claims by the policyholders. Sometimes it is also referred to as opportunistic fraud. But, when anyone deliberately plans a loss such as setting fire to property or theft of a motor vehicle that is covered under the insurance policy. This is referred to as hard fraud. Amidst COVID-19, insurance frauds have been on a rise. It is imperative to protect yourself from the fake insurance policies available in the market. An unaware customer is usually targeted by fraudsters. The simple way of fleecing the customers is by offering cost-effective insurance premium rates. Well, you might think that insurance fraud is not something new. However, there has been a significant rise in such scams. Particularly in the segments of health insurance, motor insurance, and personal accident. Some fraudsters file cases of natural deaths as a victim of road accidents to claim money from the personal accident insurance policy. To counter any such insurance fraud, preventive measures need to be taken from both the insurance company and the insurer.

Know the Preventive Measures and Save Yourself from Insurance Frauds

Most of the insurance companies in India have their call-back system. This is to find out that a customer has understood the terms and benefits offered in the policy. Let us have a glance at the following preventive measures:
  • Buy the insurance policy from the registered insurance company or authorized personnel.
  • Before signing the dotted lines, the policyholder should read and re-read the terms and conditions.
  • When you receive the policy bond, cross-check that the terms proposed matches your needs.

How to Check Whether the Insurance Policy is Fake or Not?

To help you check whether the insurance policy is fake or not, listed below are some key tips:

Buy Policy from Licensed Insurers

Whether you plan to buy motor insurance or medical insurance the purchase will be either done offline or online. In case you are making an offline purchase, ensure that the agent has a license. Look for the ID card and click a picture of it from your mobile phone. In case you are buying an insurance policy online, check the credentials of the website. If required, read the customer reviews and go with a company that has a good claim settlement and solvency ratio.

Receipt of Premium Payment

It is recommended to pay the insurance policy premium online. Or through a demand draft/cheque in the name of the insurance company. Ensure that you keep the premium payment receipts safely for future reference. If possible look for an option whether you could have a copy of the proposal form that can be reviewed later.

Use the QR Code

IRDAI has made it a mandate for all the motor insurance policies issued on or after 01 December 2015 onwards to have a QR code. So while buying a motor insurance scan the Quick Response code to check the authenticity of the policy purchased. With a QR code in place, other relevant details about the policy can also be found out easily. In case of any dilemma or query, you can also speak to the customer support of the insurance company.

Do Not Sign a Form Without Reading It

Regardless of whether you are buying the insurance or filing a claim do not sign a blank paper. Do not sign a form without reading it. Fill in the information yourself and provide correct information. It is good to remain #Bimasavdhaan

Over to You

Let us try not to be a victim of insurance fraud. In case you are not aware of something try to gather information about it. Perpetrators always have their ways of subverting the system. Take your time, stay alert and be cautious of insurance scams. Do not fall prey to any spurious calls in the name of any government authority. If you find anything to be suspicious, contact the nearby police station. Also, get in touch with the insurance company. In good or rough days, paying heed is always going to be a virtue. Let us make efforts to minimize the impact of fraud by preventing, recognizing, report and stopping it.

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