How to protect yourself from fake motor insurance policies?

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How often do we fall in the trap of such fake products? Falling victim to a fake product is always the worst nightmare for us. That is why we prefer buying from malls and supermarkets or check the product multiple times to ensure that it is not a fake one.

How often do we conduct the same exercise in case of a motor insurance policy?

Unlike for electric gadgets and mobile phones, there is no supermarket selling a car insurance policy. We often depend on the services of our agent for buying a car insurance plan. But are you sure that you are buying a genuine plan? What if the policy on which you spent your hard earned money turns out to be a fake? Is there any solution?
Rather than seeking a solution to a fake car insurance policy, you should actually take measures to protect yourself from buying one in the first place.

If you don’t know how to do that, here are some measures which would help you to avoid a fake plan:

• Buy from a licensed agent

You might have a bias in buying the policy from your neighborhood agent but you should check whether he is licensed or not. Insurance agents are mandated to be licensed agents selling products of one company which they represent. So, before you buy from an agent always make sure to check his registration and licensing details. Only buy from an agent who has a valid license to sell you the plan.

• Fill up your proposal form

It is a very common practice to depend on the agent to fill up the proposal form. The proposal form, as per the rules, is the basis of your insurance contract and is supposed to be filled in by you, the proposer. Merely signing on a blank proposal form and depending on the agent to fill out the rest, though easy, is dangerous.
The agent might fill in wrong details or opt for unnecessary riders and coverage options without your knowledge which would shoot up the premium rate. So, no matter the time involved, read and fill up your proposal form carefully.

• Pay premiums through Legitimate / Secure Ways

The premium payable is supposed to be attached with the proposal form. For paying such premiums always prefer cheques. If you are purchasing car insurance online, then make sure to pay the premium via secured payment gateways / net banking.

Premium cheques are drawn in favor of the insurer and have no possibility of being encashed without the policy being issued. If you pay cash premium, your agent might be tempted to pocket it himself. Cheque payments also create a paper transaction and would serve you with a proof of your payment.

• Insist on premium receipts

Premium receipts are issued by the insurer acknowledging your premium payment. Always insist on availing the receipt and keep it handy.

• Confirm your policy details

After your policy is issued, you get a physical policy document which also contains a copy of your proposal form. This policy document acts as an evidence of your insurance contract.

After you receive the document, cross-check all the features and benefits of the plan. Some important details which require checking include the vehicle’s IDV as mentioned in the contract, the No Claim Bonus, deductibles and the premium rate. If any discrepancy is found, you can avail cancellation in the free-look period or get the same amended.

• Always sign the proposal form yourself

Other than filling up your proposal form, you should also ensure signing it yourself. Even in case of other documents which require your signature, always make sure to do the signature yourself.

These measures, if adopted, would reduce the chances of a fake policy. One thing which you could do, alternatively, is switch to the online mode of buying a car insurance policy. Since the agent is eliminated, the chances of frauds reduce.

In the online mode, you can read the benefit details, compare the premiums, fill up the required form online and avail the policy easily. All major insurers, such as ICICI Lombard, Bharti AXA, Bajaj Allianz, HDFC Ergo etc, have their own online platforms and are available on insurance broking / comparing platforms. All in all, be vigilant and be knowledgeable when you buy a car insurance policy and you could avoid ending up with a fake one.

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