Beware of Fake Car Insurance Policies

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Besides night flight operators, pollution test centers have also been found selling fake policies to obtain other vehicle papers.

Besides night flight operators, pollution test centers have also been found selling fake policies to obtain other vehicle papers.

Most known insurance fraud usually involves the insurance company being defrauded by customers. Telling a white lie about your high blood pressure in a health insurance application form or allowing your garage to exaggerate the damage caused by the accident to your car in the claim form are common unethical practices. The insurance industry has suffered and it is coming back in the long run with higher premium rates for everyone.

Fraudulent documentation, misrepresentation of material facts, inflated claims, false claims, and moral hazard – the act of buying insurance under false pretenses in order to make a claim – are insurance frauds though. known. More complicated frauds involve the purchase of multiple policies on the same property which is then destroyed to make a claim, policies taken on non-existent properties, or the overvaluation of a property to allow for higher coverage and therefore a higher claim. high.

In this column, let’s look at examples of another type of fraud. How you, the insured, can be defrauded or used to defraud an insurance company.

Recently, a state police department uncovered a fake car insurance racket. Members of the public are contacted by a call center claiming to be, or representing, leading insurers, and offered car and health insurance. The premium is collected and bogus policies are issued, resulting in a double whammy for the “insured” who has lost their money to a fraudster and finds themselves stuck with a worthless policy.

Even more interesting is the case of mobile pollution control centers selling bogus insurance policies to customers who solicited them for a “pollution under control” certificate. A valid car insurance policy is required to obtain a PUC certificate, which is essential. Thus, the false assurance is easily imposed on the customer at a convenient time, when he is unlikely to verify the authenticity of the transaction.

Another type of fraud uncovered involves online insurance policy documents issued for motor vehicle liability coverage for a commercial vehicle, but at much lower rates by misrepresenting the vehicle class.

Distorted category

This ‘policy’, which contains correct vehicle details like registration number, excluding vehicle category, is issued in connivance with the customer, who can use it to show that they are is Motor Vehicle Act compliant and has TP coverage. This will help him get a certificate of fitness as the Road Transport Authority (RTA) systems are not linked to insurance and therefore the police cannot be authenticated.

A routine check by the traffic police can easily be handled with this document, but would be useless if one tries to make a claim on it. The repercussions here are terrible because the actual victim would be someone else who was hit by this “insured” vehicle. Claims can only be made by or on behalf of the third party who is affected (by injury, death or property damage) by the vehicle and there would be no related insurance documents to make a claim.

We’ve only seen a few types of auto insurance scams that you need to watch out for. There are vulnerabilities in health insurance and even life insurance that border on identity theft. We’ll cover them in later columns, including how to protect yourself from them and avoid aiding and abetting criminals, even if they’re being used without their knowledge.

(The author is a business journalist specializing in insurance and corporate history)

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