The insurance transaction process often includes reliance on third-party service providers, making insurance companies highly susceptible to fraud within and along its value chain.
The
Motor
Vehicles Act deems it mandatory for all car owners to have
vehicle insurance. The number of road accidents are rampant,
reinforcing the importance of a comprehensive motor insurance policy
for all vehicles. This is applicable for all commercial vehicle
owners who are required to purchase the motor insurance to protect,
both, their drivers as well as third-parties from unprecedented
accidents. This necessity has given rise to an increase in fraud
insurance cases which in-turn is a concern for the insurance
industry.
The
insurance transaction process often includes reliance on third-party
service providers, making insurance companies highly susceptible to
fraud within and along its value chain.
Significant gap in awareness
about the insurance coupled with the misrepresentation of it being a
dead investment by customers makes them an easy prey for fraudsters.
Now with the recent rule, where 2 wheeler owners have to purchase
third party policy for a period of 5 years and private car owners
have to purchase it for 3 years in addition to own damage policy, the
premium slab for vehicle insurance has increased drastically for the
consumer.
This has given rise to opportunities to fruadsters to sell
fraud policies to unsuspecting customers, since these are offered at
much lower premiums relative to the actual cost of a genuine policy.
Such
fraud trends have been noticed across the country and several FIRs
have been lodged in large numbers in cities across West Bengal,
Maharashtra, Telengana, Karnataka, Tamil Nadu, Delhi, UP, Gujarat,
Kerala to name a few.
6
essential ways to protect yourself from fake policies:
In
India, since a third party motor
insurance is made mandatory by law, it is still the most common
form of general insurance that people buy. And since customers are
not aware about the details of the policy offering and rather
consider it to be a mere formality along with other documentation,
they easily get tricked by fraudsters. These fraudsters edit genuine
policy copies previously issued by insurance companies to generate
totally fake policies in the names of the new customers. These same
policies are then shared with both the customers and the RTO. Not
only is this unlawful, but also puts the customer in a poor financial
situation in case of an accidental exigency, even more so in case of
third party life/property damage where the compensation amounts can
run into crores.
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