Although frauds in the insurance industry are usually committed by making false or inflated claims, but at times the policy bought by you may also be fake.
Fake auto insurance policy? What nonsense! That might be your reaction if you come to know that the motor insurance policy you bought recently is fake and, therefore, your claims won’t be honoured. However, it is a fact that if you don’t buy an insurance policy carefully and directly from an insurance company or a reliable aggregator, then you are likely to be short-changed.
In fact, the growing number of fraud cases in the insurance industry around the world, including India, has become a cause of concern for all the stakeholders. According to industry estimates, the insurance sector in India might be losing over Rs 30,000 crore annually due to such frauds. There are estimates that around 1-2% of the total auto insurance policies are fake, which results to close to Rs 500-800 crore of vehicle business loss in a year.
Although frauds in the insurance industry are usually committed by making false or inflated claims, but at times the policy bought by you may also be fake. The problem, however, is: How to spot a fake insurance policy or avoid buying it?
1. Buy a policy through credible resources
Tarun Mathur, Chief Business Officer, General Insurance, Policybazaar.com, says that it is not easy to spot a fake motor insurance by just looking at the policy. Therefore, one should buy an insurance policy only through renowned and credible resources, either through an aggregator’s website or directly from the insurance company.
2. Make payments through cheque or online
However, if you are buying the policy offline, then you must make the payment through a cheque. “To make sure the policy is true, the cheque should be in the favor of insurance company and not in the favor of an individual. To hedge the risk of a fake insurance policy being sold to you, you should avoid paying in cash. It is advisable now-a-days to buy online to avoid any risk and get more convenience,” Mathur says.
3. Verify policy using policy verification link
Some general insurers are also offering a policy verification link on their websites these days. “In order to confirm that the motor insurance policy is not fake, a customer can go to his insurer’s website and use the verification link to be assured about its validity. In addition, a customer may also connect with the customer care to verify the details. We have made this facility available for our customers and through the quick link option they can verify their insurance policy,” says Sanjiv Dwivedi, Head-Investigation & Loss Mitigation, Bajaj Allianz General Insurance.
4. Buy from recognised insurers & check the policy’s existence
You should also be aware of the fact that currently there are 33 accepted general insurance companies in India. Your policy, therefore, must be from one of them. Check the list using this link:
“It is always advised to buy a policy from any of the licensed entities. You can check the licensed entities and their details on the IRDAI website. Best is to buy it from the insurer directly. In case of agents or call centre purchase, you can check with the central number of the insurer (mentioned on their website) and verify the agent,” says Animesh Das, Head of Product Strategy, ACKO.
However, fraudsters can copy the logo of the insurance company and still give you a fake policy. “That is why you need to check the existence of the auto insurance policy. You can do this by visiting the registered branch office of the insurer in your city/town. Or, you can go online. It is best to write an email or make a telephone call yourself to authenticate whether the policy document issued to you is genuine,” says Anil Rego, Founder and CEO, Right Horizons.
5. Use QR Code
If you are tech-savvy, you can use the QR code to verify the policy. In fact, IRDA has mandated the insurers to print a QR code on the vehicle insurance policy, which will help one verify the authenticity of the insurance policy. “Every car insurance policy in India, bought after December 2015, should contain a QR code. Scan this code using a QR code reading app on your smartphone. When you scan the QR code, a web page will load on your mobile providing the status, details of your policy and show details of the vehicle insured,” informs Rego.
For instance, all the policies issued by Bajaj Allianz General Insurance have a QR Code and customers can scan this code in order to verify the policy genuineness.