Fake motor policies more than double in two years
Most fake policies have been linked to insuring second-hand vehicles, where it is purchased for statutory compliance rather than safety.
For the year 2016-17, 498 fake policies were sold, which rose to 823 in 2017-18, the number further increased to 1,192 in 2018-19, finance minister Nirmala Sitharaman told the parliament in a written reply earlier this month. Most of the duplicate policies have been sold to truck and two-wheeler owners, who buy them to avoid scrutiny.
All of these are sold as renewal policies, with almost identical data that is contained in a genuine motor policy, making it difficult to differentiate from the orginal. “A genuine motor insurance policy will cost Rs 10,000, while a fake policy would cost between Rs 5,000-6,000. The vehicle owner is much aware that the fake policy certificate could only help to escape the police, but not help while claiming for damages, however many purchase them,” Sanjiv Dwivedi, head of investigation & loss mitigation team, Bajaj Allianz, said. “About 70% of vehicles in India are not insured.”
“We have filed about 93 cases with the police against fake motor insurance policies in 2018, many of which were sold in Ferozepur in UP, Tiruvananthapuram in Kerala, and Akluj in Maharashtra so far,” Dwivedi added. IRDAI said that it had received complaints directly relating to three entities — AKPCL General Insurance Company in 2016, Gone General Insurance and Marines Technology in 2019 — for fake policy sales, in the past.
Most fake policies have been linked to insuring second hand vehicles, where it is purchased for statutory compliance rather than safety.
“Finding fake policies is nothing new to the insurance sectors. Fake agents mislead customers using our brand name to sell at lower rates,” Sanjay Datta, head of underwriting, claims, reinsurance and actuary of ICICI Lombard, said.
To combat this menace, insurers have started to fix bar codes, which when scanned will throw details of the policy. Some others afix 3D holograms and also educating the police and investigation agencies to differentiate between a original and fake policy.
“Bajaj Allianz has issued a link where the barcode on the policy paper, and help check the authenticity of the policy. We had also conducted training for around 2,580 police officers last year on checking authenticity of the motor insurance policy,” Dwivedi said.
“Besides providing barcode and QR code on the insurance document, 3D hologram stickers were recently introduced to help during police verification,” said SBI General Insurance COO Atul Deshpande.