How to Identify Fake Motor Insurance Policy
06
Jan 2025

Introduction to Identifying Fake Motor Insurance Policies

The rise in fraudulent insurance cases has become a serious concern, affecting policyholders and contributing to economic losses. According to the India Forensic Centre of Studies, India faces annual losses ranging from $3.5 billion to $6.4 billion due to insurance fraud, with motor insurance fraud making up a significant portion of this figure (Source: Wikipedia). The damage caused by these fraudulent activities impacts stakeholders, policyholders, and the economy as a whole.

While it’s impossible to completely eliminate insurance fraud, you can avoid falling victim by being cautious and informed. Many people are lured into purchasing fake or misleading policies, sometimes even from reputed companies, especially when buying motor insurance online. 

Also Read: Inclusions and Exclusions of Motor Insurance Policy

How to Identify Fake Motor Insurance Policy?

Here are some essential tips for identifying fake motor insurance policies which can help you safeguard against fraudulent car insurance policies:

Always Request a Receipt

A receipt is proof of your transaction and outlines the payment details. If fraud occurs, this document can be crucial for legal recourse. Always double-check the receipt to ensure that essential information, such as the company’s address, email ID, cheque number, bank account number, and IFSC code, is correctly listed. Missing or incorrect details may indicate fraudulent activity.

Also Read: How to Check CIBIL Score by Using PAN Card?

Ensure Your Signature is Authentic

Your signature on the proposal form is your legal identity. Never allow anyone else—whether an employee, agent, or nominee—to sign on your behalf. Forged signatures have become more common, particularly with online insurance purchases. Before signing any documents, verify details like the car model, registration type (private or commercial), fuel type (petrol, diesel, or CNG), and the car registration number. If anything seems inaccurate, report it immediately.

Also Read: How to Check CIBIL Score?

Verify the Insurance

One of the most reliable ways to verify insurance is by scanning the QR code on the insurance proposal form. Since 2015, the Insurance Regulatory and Development Authority (IRDA) has made QR codes mandatory to combat fraud. If you’re buying motor insurance online, check if the company provides a verification link. This could be a red flag if they refuse or are hesitant to offer one. You can also contact the company’s support team or visit their nearest office to verify the policy’s authenticity.

Also Read: Check CIBIL Score for Free

Look for IDV and NCB Details

Pay special attention to the Insured Declared Value (IDV) and No Claim Bonus (NCB) in the agreement. The IDV represents the total amount you will receive in case of a claim, while the NCB ensures no additional deductions if you haven’t made a claim in the previous policy period. It could signal a fraudulent policy if you notice unexpected deductions or unclear terms in the agreement. Never agree to deductions that aren’t explicitly stated and justified.

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Verify Through QR Code

The Insurance Regulatory and Development Authority (IRDAI), which is the governing body of the insurance industry, has made it mandatory for every insurance policy that’s being sold to have a QR code. This code helps you to check the genuineness of the policy. You can scan the QR code on your smartphone using a QR scanner app. Upon scanning the code, you can view the status and the information related to your insurance policy.

Also Read: Ways to Check Your Vehicle Insurance Policy

Conclusion

To avoid falling victim to motor insurance fraud, it’s crucial to take a proactive approach. Always verify the policy details, ensure your personal information is accurate, and double-check the provider’s legitimacy before committing. By being vigilant and aware, you can protect yourself from the growing threat of fraudulent car insurance policies.

How to Identify The Fake Motor Insurance Policy FAQs

  1. How can I verify if my motor insurance policy is genuine?

Ans. You can verify your motor insurance policy by scanning the QR code on the insurance proposal form, which the IRDA made mandatory in 2015. Additionally, you can cross-check your policy on the insurer’s official website or contact their customer service for verification.

  1. What should I check on the receipt to confirm a valid insurance policy?

Ans. Ensure your receipt includes all essential information like the insurer’s address, email ID, cheque number, bank account details, and IFSC code. Missing or inaccurate details might indicate a fake policy.

  1. Can my motor insurance policy be fake if I purchase it online?

Ans. While online purchases are convenient, there is a higher risk of encountering fraud if you don’t purchase from an authorized source. Always ensure you buy directly from the insurer’s official website or through a verified agent. If in doubt, verify the policy through official channels or in person at the insurer’s office.

  1. What is the importance of self-signing the insurance proposal form?

Ans. Your signature on the insurance documents is a legal form of identification. Never allow anyone else to sign on your behalf. Always verify the details on the form before signing to ensure accuracy. Fraudulent policies often involve forged or unauthorized signatures.

  1. What should I do if I suspect my motor insurance is fake?

Ans. If you suspect your policy is fake, immediately contact the insurer’s customer service, report the issue, and verify the details. You can also file a complaint with the Insurance Regulatory and Development Authority of India (IRDAI).

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