#insurancefrauds

An auto insurance policy protects you against financial losses caused by accidents, theft, vandalism, or natural disasters. It is also required by law. There’s nothing unusual about people purchasing two insurance policies. Your car insurance may include a breakdown policy, but you are also paying for a separate breakdown policy, unaware that it comes with your insurance. Is it possible to have two auto insurance policies on one car? Are you able to file a claim with two different insurance companies at the same time?

What Is The Legality Of Having Two Auto Insurance Policies?

There is nothing illegal about having two auto insurance policies on the exact vehicle. It is, however, possible that your insurance company won’t cover the same car twice, and there is a possibility that you will have to obtain a second insurance policy from a different company. It is common for drivers to buy a second policy when they mistakenly believe that their first policy has expired. It is not uncommon to have a separate policy to cover their classics or exotics.

Can You File An Auto Insurance Claim With Two Different Insurance Companies Simultaneously?

Always remember that you can protect yourself from loss but not profit from it. Having two auto insurance policies but filing the same claim with two different companies is not. If two insurance companies compensate you for the same claim, this amounts to double compensation, which could be considered insurance fraud. There shouldn’t be a difference in payment whether you have two insurance policies or just one.

Does It Make Sense To Have Only One Auto Insurance Policy?

You can end up violating the policies of your car insurance provider when you have two approaches. You may also violate a clause in your policy. You might also be viewed as a fraud by your insurer. In an accident, both insurers may refuse to pay your claim, putting you and your co-owner in a tight spot. You and your co-owner must insure the vehicle with a single policy to avoid confusion and nonpayment of claims. The procedure can be in both your names or shared with another person.

What Are The Ways An Insurance Company Detects Auto Insurance Fraud?

Double coverage does not necessarily mean you are committing car insurance fraud. To obtain restitution for unjust enrichment, an insurance company must prove the following:

Policyholders have benefited at the expense of insurance providers.

Policyholders are aware of the benefits of the claim payment.

Even though they know the profits, the policyholder has retained the use.

The Ombudsman of the Life Insurance sector has been receiving a number of complaints with regards to the mis selling of life insurance policies by the intermediaries. In the case of non- life insurance sector, the complaints have been mostly pertaining to the claims being rejected with regards to the existence of a pre- existing ailment. The mis- selling is often being done by forging the proposer’s signature on documents of a long term plan even though the proposer clearly did not have the capacity to carry on the policy for a long duration, as reported by the Council of the Insurers or the ECOI. The IRDAI has also made it compulsory for all insurers to follow up with the verification calls and yet reports have emerged that the agents and the brokers have been persuading the customers to accept all terms and conditions unquestioningly when they receive the calls.

There are equal numbers of complaints from both life insurance and non- life insurance policy holders across India, according to MML Verma, the Secretary General. Out of them, the complaints pertaining to health insurance in the non- life insurance segment was exceedingly high.

According to Milind Kharat, the insurance ombudsman in Mumbai and Goa, the amendments that were made in 2018 gives the ombudsman the power to pass orders against insurance companies as well as intermediaries, which means that such orders can be passed against banks as well. However, the insurance company will be held responsible predominantly because that is whom the agents represent. Moreover, the office of the ombudsman is a very effective platform for bringing such issues to light as there are no fees or legal assistance required. Customers can make their complaints with just an email. Nevertheless, the ombudsman still did not have the power to impose penalties and so the maximum they could do in case a complaint was found valid was to order the refund of the premium amount.

There is another limitation that the ombudsman faces which is that the maximum award that he can issue is for Rs 30 lakhs. Considering the fact that some policy holders are taking health insurance cover up to Rs 1 crore or higher, it has been recommended that such limits should not be imposed in case of individual complaints.

Apart from citing pre- existing illness, complaints have been made on the basis that the insurance claims were rejected as the insurance company felt that the expenditure was not made reasonably and was completely optional. According to Mr. Kharat, the term “reasonable” itself was a very relative term and what could be considered reasonable for one might not be so for another, depending on the part of the country one resides in or the immediate circumstances one had to face. In many cases, insurers also reject claims during cataract operation on grounds that the lens used was too expensive. In case of the exclusion of the same, the inadmissibility of the cost of the multi- focal lens should be clearly stated in the policy during such a surgery. Efforts are being made to safeguard the proposers and the policyholders against such loopholes and they should decrease the woes of the common man to an extent.