With Knowledge Comes Vigilance! 

Fake calls, fraudulent insurance sites, fake insurance policies, phishing scams, and identity theft are some of the main types of insurance frauds that you may come across.

One infamous example of insurance fraud that made the news involved a group of four scammers who targeted people aged 50 and older. The scammers asked their victims to pay premium to “revive” their expired policies. Some victims lost lakhs of rupees due to these scam calls. The details of this case can be found on Times of India’s article.

The best way to prevent insurance fraud is to be aware of all the methods used by scammers to trick victims into giving them money. Awareness about the insurance industry will help you detect suspicious agents and will help you stay away from scam policies that sound too good to be true.

If you or someone you know are victims of insurance fraud, then you should contact your insurance providers, relevant law enforcement agencies in your area, and regulatory bodies like the Insurance Regulatory and Development Authority of India (IRDAI). You may also file a consumer court complaint against fraudulent insurance providers.

Research the insurance provider, check the authenticity of the insurance agent, and carefully read through any legal document provided by the insurance provider. You should also avoid giving away private bank details or personal documents to suspicious agents. Also, keep a track of all the premiums you have paid over the course of your insurance term.

Stealing personal data (especially financial data), misappropriation of funds between third parties and fraudulent agents, and selling of fake or overpriced insurance products are some of the emerging treads of insurance fraud in India.

If you are buying an insurance policy on a website, make sure that the website URL is legitimate. You should also check the insurance company’s legality/license and check customer reviews to find out if the insurer has a good claim settlement ratio. If you are paying for your premium via UPI, never share your OTP (one time password) with anyone.

A tell-tale sign of insurance fraud is that the policy is way too good to be true. Most legitimate insurance sellers have competitive rates and generally follow similar policy trends, so an extreme outlier might be a fraud policy. Another suspicious sign is the insurance agent trying to pressure you into buying policies as quickly as possible without follow proper protocol.

If you suspect that the insurance agent or company is fraudulent, then it is best to cut off contact with them completely and look for another insurance provider. If you have already fallen victim to insurance fraud, then contact the legal authorities as soon as possible.

The Insurance Regulatory and Development Authority of India (IRDAI) is one of the main government agencies that regulate the insurance industry. This regulatory body helps policyholders detect fraud and take legal action against fake insurance providers. The Serious Fraud Investigation Office is another government body that deals with insurance fraud and other white-collar crimes.

Yes, insurance fraud can lead to an increase in premium costs. According to an investigation posted by Deloitte India, insurance companies in India lose around USD 6 billion every year. Insurance fraud can impact the insurers financial stability and reputation, which, in turn, hurts policyholders due to increased premiums.

Insurance companies will investigate any claim that they suspect to be fraudulent. Every insurance company has its own fraud investigation policy. A claim may be suspended during the investigation, and the claim will be outright denied if the insurance company finds proof of fraud.