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How to Spot and Avoid Car Insurance Fraud in India

Updated: Jul 22, 2022

Ashish is a Delhi resident who recently purchased an automobile as one of his prized things. He was happy with his purchase, despite the fact that it was a used car in poor shape. When it came to getting insurance, he was befuddled and began looking for a good deal online or through friends.

He received a claim from a well-known insurance company’s salesman not long after. The salesman provided him with an enticing idea and asked him to send monies to a personal UPI ID that was sent to him through SMS. After transferring the cash, he was also provided various policy documents via email. He later attempted to use his insurance to repair his car after being involved in an accident, only to discover that the policy was no longer valid.

What is the definition of car insurance fraud?

Scams involving car insurance are known as car insurance scams. Fake insurance companies or agents are the main culprits of this type of scam.

Car insurance frauds can be classified into the following categories:

The following are some of the most common types of insurance fraud in India-

1. Insurance firms are the victims of insurance fraud:

Insurance companies are occasionally the targets of such scams. Fraudsters use a variety of techniques to deceive the insurance companies when it comes to settling claims. To get the deduction, techniques like staged accidents, exaggerated damage, and escalated claims are used.

2. Policyholders are the victims of insurance fraud:

When it comes to car insurance fraud, it’s important to remember that the fraudsters target not only the insurance companies, but also the policyholders. Fake insurance agents are the most common fraudsters.

How can you avoid vehicle insurance fraud in India?

Let’s look at some of the tips you may use to avoid dealing with a fake insurance company or agent when buying a car insurance coverage, as listed below:

Purchase from the insurance company directly:

You must contact an insurance firm that operates on a direct-to-customer basis. You can also browse for insurance businesses that operate entirely on the internet. This will allow you to get motor insurance directly from the company, reducing the risk of fraud. You must also confirm that the insurance provider is reliable and licensed. You may have to compromise later if the company is not registered with the IRDAI.

Obtain an insurance premium receipt:

You must obtain a receipt every time you pay your auto insurance payment. Getting receipts for all of your transactions is even better. If the policy turns out to be a fraud, the receipt might be utilized as evidence in a court battle against the deceitful insurance firm.

Review and discuss terms and conditions:

The majority of individuals do not read any document’s terms and conditions. When you read the terms and conditions of a policy, however, you will have a better understanding of the policy’s features and benefits. Insured Declared Value, No Claim Bonus, and Deductibles are three of the most important aspects of car insurance. As a result, you should take the time to carefully read the terms and conditions.

Pay by check, credit card, or online:

When you pay your premium with a check, credit card, or even net banking, you are paying the insurer directly, not a mediator. There will be no confusion or risk if you employ these techniques.

Verify by scanning the QR code:

According to the Insurance Regulatory and Development Authority of India (IRDAI) requirements, every insurance firm must have a QR code. To determine whether the policy is real, you must scan the code. A policy’s QR code contains the status as well as the contents of the insurance policy, which can be used to verify the policy’s and insurance company’s credibility.

It’s not a good idea to sign a blank form:

You must not sign a blank paper or a check while purchasing insurance. You are responsible for completing the form on your own. If you sign a blank form or a check, it can be used for a variety of purposes, and you will be charged a high fee.

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