Like anything involving money, fraud in insurance is a reality.
Fraud is a deliberately dishonest act that causes actual or potential financial loss to a person or business.
Fraud can range from over valuing damaged or stolen items, or not declaring relevant and known information when signing up for insurance or it could be a highly organised criminal undertaking logging in fake claims.
Insurance companies have put up various measures to protect their businesses and customers from fraud but it has not been full proof, and there are still cases of fraud.
As a consumer, there are various measures you can take to protect yourself from fraud;
- Be an informed customer- seek out information about the insurance you are about to purchase. This information can be from peers, insurance companies and the internet.
- It pays to shop around- before signing on the dotted line, shop around from other insurance companies. We now have several online comparison sites for insurance products these can be helpful in determining which type of cover suits you.
- Consider how you pay- always make sure that your payment is supported by evidence. Mobile money or bank transfers always have evidence of the transaction. Avoid paying premiums through cash. However, if you chose to use cash, ensure you get a genuine receipt or some form of acknowledgement of the payment including the date, amount paid as well as who has received the money.
- Know your agent or broker- There have been several cases of customers paying unlicensed agents/brokers and end up with no cover, yet they paid a premium. You can ask to see the agents/broker’s license to sell insurance, you can call the insurance company whose product they’re selling to you to confirm they represent the company and you can also check the IRA website to confirm they are licensed (https://www.ira.go.ke/index.php/regulatory-framework/regulatted-entities) .
- Get your copy of the insurance policy- You should receive a copy of any type of insurance policy complete with terms and conditions outlining your coverage and its limitations within a reasonable period after your purchase. If you do not receive it, question your insurer, agent or broker.
- Inform your beneficiaries- If you have taken out any form of life insurance or are saving for retirement in a pension scheme, it is important to inform your dependants or your beneficiaries. We have witnessed many life insurance policies go unclaimed because the named beneficiaries are unaware.
- Don’t send money or give out personal information in response to an unexpected request — whether it comes as a text, a phone call, or an email. Call the insurance company directly to verify the request.
Do not be pressured into purchasing insurance that you are not sure you need. Take time to decide what is right for you.
Read your policy carefully before you sign. If you have questions, ask your agent or broker, or your insurer.