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Insurance fraud is nothing but a scam involving insurance policies, mostly done online where people or groups of people dupe others of money in the name of insurance. This is done by distorting information about insurance plans or at the time of making claims to have monetary gain. There are many forms of insurance frauds taking place in the form of fraud application, fraud insured, fraudulent identity, fake claims and fake insurance companies and so on.
Such fraudulent activities affect everyone including the policyholder, the insurer, the genuine people who pay premiums to gain insurance benefits and so on.
Among the common types of insurance fraud activities that are involved in an insurance scam include;
All these and much more frauds are present that a genuine policy seeker should be aware of and stay safe from.
This may include things like providing false exaggerated claims, fabricating false healthcare records, filing several claims for one incident and so on. Also, it can be a case of applicants offering wrong information about their age and occupation or about their health condition and so on.
Provider frauds are those where providers file for bills to the insurer for certain services which were not at all included in the treatment. Or they may bill for certain services at double the rate.
Under an application fraud, the insured offers false information on the application form while purchasing the policy so that they can get the plan at lower premium or to get enhanced coverage.
Under such cases, the policyholder intentionally misrepresents certain facts and information regarding the lifestyle, job or health of the policyholder so as to receive lower premium rates.
This type of fraud occurs when someone uses another person’s identity in order to obtain insurance coverage or to receive enhanced benefits from the insurance company.
In this fraud, the applicant or the policyholder submits a claim for something that never happened such as an injury, accident etc.
When insurance fraud detection takes place, it can have some serious consequences for the ones doing the crime as well as the victim. If an individual is found guilty of a fraud, he/she is tried under prosecution for criminals. The person may be levied with large fines and jail depending on the gravity of the crime.
Further, insurers may levy added penalties like suspending one’s benefits under the policy. They may also take civil action against people who commit fraud.
It is crucial that people should know about the fraud schemes so as to stay protected against them and save them from being a victim. Also, if you suspect that you have been a victim of insurance fraud, it is important to contact the police immediately.
Additionally, you may report about any suspicious activity that you notice to your insurer so that appropriate action could be taken.
To Conclude
As discussed, insurance fraud is a crime that is punishable and the people involved in such crimes may get severe penalties. So, it is better to stay safe from such things. Moreover, it is also important to know and be aware of the various kinds of frauds that are going on iesn the insurance sector so that you can stay away from being a target to such fraudulent practices.
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Insurance frauds are mostly committed by organized criminals. They steal huge amounts of money from insurance companies and common people in the name of insurance through fraud activities. Even the general public commits insurance frauds to cover their deductibles.
Some commit insurance fraud as they see filing claims as an opportunity to make easy money.
Here are some examples of insurance fraud:
Exaggerating damages
Application fraud
Eligibility fraud
Staged accidents
Claims fraud
When an investor invests in a policy or some kind of investment option, the individual steps into an uncertain situation to gain from it. That uncertainty is known as risk. There are different types of risks which originate from varied situations.
There have been many top insurance frauds in India over the years. Some of these cases were reported in many case studies on insurance frauds in India.
PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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