Insurance frauds might not be a term we often hear in news or otherwise. However, this surely doesn’t mean it exists not. Actually, it’s a bigger and more serious a problem that most of the people, read common masses, know about or realize. When insurance policies are abused, every one of us who buy one insurance policy or the other ends up paying the cost. The reason being, fraudulent claims in different types of policies shoot up the premiums as insurance companies increase costs. In fact, a few people know about the insurance fraud but every one of us, knowingly or unknowing, become a victim of it. Therefore, it’s important to know about different types of frauds prevalent in the insurance industry.
There are more ways than one to raise fraudulent damage claims. In all the fake claims, however, one thing remains common throughout – someone or the other tells a lie about how the damage was done and makes claim even knowing that it is illegitimate. The fraudulent claims for vehicle and physical damage to other properties are more common and prevalent than most of the people can actually think of. In such a situation, having effective strategies to prevent insurance fraud is imperative.
On the other hand, fraudulent injury claims are also common and involve exaggeration and invention of injuries after an accident occurs. Usually, in small accidents wherein injuries are less likely to occur or minor in nature, people pretend to have incurred bigger injuries. People oftentimes come complaining a severe neck or back pain that are difficult to verify but worth making claims. In such cases, people who come to know about such things can help reduce frauds in insurance claims. The need is to make people aware of where and how to report insurance fraud so that checks can be placed on the same.
Another type of fraud in insurance claims is exaggerated or false theft reports. In theft insurance, claiming more than the losses one actually faced is a fraudulent practice. This type of fraud in insurance claims is quite prevalent. For example, if someone breaks into a house and steels jewellery worth 2 Lakh and the owner makes a claim for jewellery worth 5 lakh is a fraud. Sometimes policyholders go to an extent to abandon their cars at difficult to locate places and make a claim on car theft. Owing to the lack of knowledge, people don’t report insurance fraud. This makes the problem bigger than it actually is. Here, making people aware of such frauds and offering rewards will help largely.
One of the biggest things that can help prevent frauds in insurance is to spread awareness and make people aware of how and where they can report such frauds. What can further come out to be one of the biggest differentiators in reducing frauds in the insurance sector is announcing a reward for reporting insurance fraud. With stimuli, it’s highly likely that people start reporting insurance claim frauds more often.
The insurance sector is full of frauds. In fact, frauds in insurance are more prevalent than any other sector. The problem lies in lack of awareness as a few know about frauds taking place and those who know don’t report any. However, people fail to realize that they will end up paying more insurance only because of these frauds. Hence, it’s very important people know where and how to report insurance frauds and they should be properly rewarded for it.
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