- Date : 23/07/2019
- Read: 3 mins
If an agent is offering you a significant discount on motor insurance and add-on cover, it would bid well to cross-check the agent's credentials with the insurance provider.
As per the IRDAI’s fraud monitoring cell, there has been an alarming uptick in the sale of fake insurance policies over the last two years. A reported Rs 53.7 crore worth of fake motor insurance had been sold in the period. The number of reported cases has grown from 498 in 2016-17 to 823 in 2017-18 and further up to 1,192 for the last FY 2018-19.
The situation has gotten distressing to the point that Finance Minister Ms Nirmala Sitharaman had to address the issue herself. Via written communication, the FM said that these fake policies are ones that are renewals, mostly purchased by truck and two-wheel owners.
The counterfeit policies have data identical to the genuine insurance policy, making it difficult to differentiate. The bogus policies, mostly linked to second-hand vehicles, come at a 40%-50% discount. While these policies may help get by the local traffic cop, they will not offer any relief from damage claims. They are compromising on roadside safety, other than blatantly disrespecting the law.
As per Sanjiv Dwivedi, head of investigation and loss mitigation at Bajaj Allianz, about 70% of the vehicles on Indian roads are not insured. His company has filed about 93 cases with the law enforcement authorities, for fraudulent policies, many of which were sold in Thiruvananthapuram in Kerala, Ferozepur in UP, and Akluj in Maharashtra revealed an industry report.
Three entities, namely, AKPCL General Insurance Company in 2016, Gone General Insurance and Marines Technology in 2019 have been found to be directly involved with the scam, as per IRDAI.
In a bid to combat the menace, insurers have started adding additional security features to the policy. Bajaj Allianz, for example, has incorporated a barcode on the policy paper, which can be scanned to authenticate the policy details.
Additionally, the company has been conducted training sessions for around 2,580 police officers to understand better how to verify the authenticity of a motor insurance policy.
Along with the barcode and QR code, SBI General Insurance has added a 3D holographic sticker that will make it easier for the police to verify.
Have a look at these 6 motor insurance terms you must absolutely know to be cognizant of fraudulent practices. Get satisfactory proof of identification from agents and the insurance company they represent, and make payment through cheques or digital medium from where the transaction can be traced, in case a dispute arises.