The surge in insurance fraud is worrying because more honest policyholders are tricked by fraudsters. Reasons for this increase include more use of digital technology, remote work after the pandemic, and less effective control measures.
Insurance fraud is a significant concern in India, posing financial risks to both insurers and policyholders. Common types include fake claims, staged accidents, premium scams, and identity theft.
The surge in insurance fraud is worrying because more honest policyholders are tricked by fraudsters. Reasons for this increase include more use of digital technology, remote work after the pandemic, and less effective control measures.
“To steer clear of becoming a victim, it's crucial to understand common scams and take preventive steps. Fraud in India's insurance sector can manifest in various forms such as fake claims, staged accidents, premium scams, and identity theft, all leading to financial losses and higher premiums for honest policyholders. Begin by carefully selecting a trustworthy insurance provider. Review policy documents thoroughly and maintain clear records of all transactions. Report any suspicious activities promptly to your insurer or authorities. Protect your financial well-being by learning how to avoid insurance fraud,” says Naval Goel, founder and CEO of PolicyX.com.
Application Fraud: Policyholders providing false information to obtain lower premiums or increased benefits.
Bogus Claims: Policyholders or beneficiaries filing false claims, often involving fabricated deaths or staged incidents.
Fraudulent Policy Changes: Changes made to policies without the knowledge of the policyholder.
Sale Of Fake Insurance Plans: Fraudsters selling non-existent insurance policies with enticing bonuses or loans, resulting in financial losses for policyholders.
Identity Theft: Fraudsters use personal information for unlawful financial transactions, causing financial and psychological harm to victims.
Combatting insurance fraud requires vigilance and robust security measures.
Utilize innovative solutions like AI-based rule engines to not only save costs but also improve the overall customer experience.
Increase your customer base to reduce operational expenses and ensure the reliability of verification processes.
Safeguard yourself from fraud by choosing reputable insurers with user-friendly technology, ensuring accuracy in your applications, and staying alert for any changes to your policy.
Be cautious of attractive offers and prioritize safeguarding your personal information by opting for insurers with robust Know Your Customer (KYC) procedures, including video KYC and advanced biometric checks.
Avoiding cash payments for insurance premiums is recommended due to their inherent risks. Cash payments are prone to theft, loss, and lack of proper documentation. Additionally, resolving disputes or errors related to cash payments can be challenging. Instead, opt for safer alternatives such as online payment systems, credit/debit cards, bank transfers, or other electronic payment methods. These options provide a secure and traceable transaction trail, ensuring transparency and peace of mind for both the policyholder and the insurance company.
Using caution and avoiding sharing sensitive documents or information unless absolutely necessary is crucial. Be cautious of phishing scams, unexpected calls, and suspicious emails seeking personal details. Only disclose such information to trustworthy organizations like your insurance company or bank when required. Additionally, use secure communication channels. Protecting sensitive data helps prevent fraud, identity theft, and unauthorized access to your financial and personal accounts.
It's vital to thoroughly study all policy details before purchasing insurance coverage. This includes carefully reading the terms and conditions, coverage limitations, exclusions, and any other requirements. Understand the boundaries of coverage, deductibles, claim procedures, and renewal terms. Pay close attention to the fine print and ask for clarification if anything is unclear. By doing so, you can make an informed decision and ensure that the insurance meets your specific needs and expectations. This also helps prevent surprises or misunderstandings during the claims process and ensures complete coverage in the event of an unfortunate incident.