Did you know that an insurance policy purchased by you can be fake? Yes, there are chances when you do not research well or take enough safety while buying an insurance policy. Sadly, many policyholders realize that they have a fake insurance policy only when they make a claim. After all, what is an insurance policy till you make a claim? It is just a piece of paper with a seal and a signature. The growing number of insurance fraud cases has become a worry for insurance companies and policyholders in India. According to the Indian Forensic Centre for Studies report, the losses caused to the insurance industry due to fraud are estimated to be over Rs. 30,000 crore every year. While one may think that insurance frauds are generally committed by making false claims, fake insurance policies are one of the leading types of insurance fraud in India.
If currency notes can be duplicated in India, anything is possible. Anyone with a basic printer at home can print out a fake insurance agreement. Every year, there are thousands of policyholders who fall for this scam. Fake insurance policies are those policies that are sold by unauthorized insurance companies with the intention to make money without providing insurance coverage. It is nothing but a fake insurance policy from a deceitful company which does not even exist. If policyholders research well before applying for insurance, they won’t fall for fake insurance policies.
Owning a fake insurance policy can give you the shock of your life when your car is damaged and you need to make a big claim. The situation can get worse if you have large third-party liabilities to pay. You need to be extremely careful to avoid such a dreadful situation. Even otherwise lakhs of people pay yearly car insurance and hardly anyone meets with an accident, the percentage of accidents against the number of policyholders is negligible numbers. Where does all this money go? Every year you have thousands of rupees as insurance for allegedly assumed insurance. There is no accountability for this money.
These other comments are arguments where under certain circumstances it’s beneficial to SOME people. But the chances are it is not beneficial to _you_. This is why insurance can function as a for-profit business that is one of the most profitable businesses in the world and indeed how one of the richest men in the world Warren Buffet made most of his money. It is a guaranteed private tax on public citizens and mathematically as long as these businesses survive it will always benefit fewer people than it helps. In fact, the only people who probably have a net gain from insurance are people who have gamed the system in some way. For the rest of us, it is simple math to add up your premium payments over the years and compare it to what you have been paid, which in most cases is nothing.
The brainwashed jesters here will tell you that it is worth it because it’s easy to defend the status quo, but if we got rid of mandatory insurance there would be more money for everyone outside of the insurance industry. It is estimated that on average, in one hour, around 55 road accidents occur in our country. This is where car insurance comes into the picture. Those who have a valid insurance policy can approach their insurer. The insurer will pay for the damage. However, no one will cover the people who do not buy insurance. And if they cause an accident, they will have to bear the cost from their pocket.
This is exactly why it is a law in India to buy Car Insurance. Under Chapter 11 (Section 145 to 164) of The Motor Vehicles Act, 1988, it is compulsory to buy at least a Third-party Car Insurance Policy in India. Buying insurance is parallel to saving money to cover yourself financially in case of an accident. But the scope of these savings increases to a great extent when you have an insurance company to back you. The government has made it mandatory to buy car insurance because no person should suffer a financial loss from an accident. If they do, they should be compensated fairly. But 90 per cent of the population spent their hard-earned money just assuming an accident but they pay money for years but such things happen. If a person pays for more than five long years and no casualty happens in that case the policyholder should get some concessions or benefits.