The Rising Trend of Insurance Fraud

"All that glitters is not gold." Nowhere is this sentiment more apt than in the realm of insurance fraud.

Often through blatant mis-selling of insurance policies and manipulation of facts, innocent policyholders become victims of insurance claim fraud. Let us peel back the layers of deception and understand how mis-selling takes place.

1. Understanding Insurance Fraud: 

Insurance fraud is defined as deliberate and dishonest measures made by people or entities to exploit insurance policies, undermining the integrity of the insurance system by manipulating the claims process for illicit profit.

Insurance claim fraud can be classified into two categories -

• Hard Fraud: Hard fraud occurs when individuals intentionally fabricate or stage events to make false insurance claims with the intent to deceive insurers. Examples include staging accidents, arson, or submitting entirely fabricated claims. 
• Soft Fraud: Also known as opportunistic fraud, it involves exaggerating genuine insurance claims and manipulating factual details to increase the value of a claim. Examples include overstating repair costs after a minor accident or including pre-existing damages in a claim.

2. Examples of Insurance fraud

Insurance fraud can take many forms, here are a few examples-

• Unjust claim rejections 
• Charging exorbitant premiums 
• Cancelling policies without cause 
• Policyholders Faking accidents 
• Inflated medical bills and exaggerated injuries 
• Applicants misrepresenting their income, health etc 
• A third party adding themselves as a beneficiary in a Life insurance policy via identity theft 
• Submitting fraudulent documentation 
• Filing false claims on behalf of others. 
• Exaggerated Costs of car repairs

3. Defining Mis-selling

From misleading advertising, deceptive sales practices, burying critical details in the fine print or denying legitimate claims on flimsy grounds, if you were sold a policy with a false promise, it is considered mis-selling.

4. The Telltale Signs of mis-selling

• A regular premium plan was sold as a single premium plan. 
• Unsuitable insurance plans were sold through manipulation of facts for the sake of selling them. 
• Facts were hidden in the fine print. 
• Forgery and tampering of proposal form. 
• Forced to buy insurance policies for a loan sanction. 
• Promises like “3 saal main paisa double.” 
• Fake calls in the name of officials of IRDAI, RBI, SEBI, Income tax etc.

5. The Human Cost

But amidst the chaos, it's easy to forget the human stories behind the statistics. From small businesses struggling to stay afloat after falling victim to insurance fraud to innocent policyholders left holding the bag for fraudulent claims, the human cost of insurance fraud is immeasurable. 

6. Empowering Policyholders 

Such tactics erode trust and leave policyholders and insurance companies feeling betrayed. We see you, and we care. You are not alone in this and need not fight alone. 

If you believe there was misrepresentation involved in the purchase of your insurance policy, contact subject matter experts to deal with complaints about Insurance company for any insurance claim-related issue. 

Help is but a few clicks away. 

Conclusion 

Insurance fraud and mis-selling is a situation where the stakes are high and the consequences dire. But experts are always there to give you the upper hand and guide you through murky waters. Here at BSK, SEVA is our Dharma. By empowering policyholders and demanding accountability, we strive to build a future where justice prevails and insurance truly serves the needs of the people.