Insurance Fraud in the Philippines that you should be Aware Of
Being a victim of insurance fraud can cost too much in financial, legal court, and emotional trauma. However, avoiding such tragedy can be avoided to be prevented with the right knowledge of how such crime works
There are many instances when insurance fraud occurs, for example, when a consumer tries to find insurance for his/her car. According to the Philippine Insurers and Reinsurers Association, car insurance scams in the Philippines costs more than a billion pesos a year. In 2015 alone, an estimated ₱700 million lost to car insurance claims which were considered fraudulent. The Insurance Commission has already issued an order addressed to all car insurance companies to submit their anti-fraud strategies and policies to lower or eradicate the occurrence of car insurance fraud.
Under Circular Letter 2016-50 dated September 6, the Insurance Commission asked firms to draw up an anti-fraud development plan for their businesses by 2017 to prevent or “fight it if it occurs.” But, why do these insurance frauds are continuing to rise? One factor is that some fraud companies see more opportunity to market insurances, and of course, it has good money.
Insurance Scams You Need to Be Aware Of
As stated above, most victims of scamming are consumers that are new to the insurance process. Marketing fraud insurance to them is easy, so, here are some insurance frauds that an insurance buyer should be aware of when it comes to choosing a trustworthy insurance company.
- Intentional Accidents – Staged accidents are one of the most common insurance scams in the world. Let’s take for example when a consumer tries to a car insurance company. Scammers will often trap the victim in a rear-end collision or lure them into making an early turn and collide with an oncoming scammer. So, for customers who had only purchased a new car, or is a new driver, keep in mind this kind of scam strategies and be careful on the road.
- Fraudulent Insurance Agents – Some scammers will call or text you over the phone and act professionally to give you a good impression. Before you get convinced with this agent’s seemingly irresistible offer, make sure that you are talking to an accredited agent of a reputable and financially stable insurance company. Ask for their agent license number and the name of the company they are working in. Verify this information from the official website of the Insurance Commission.
- Repair Scams – Whether it is for your home or car insurance, scammers will have a strategy just to fool and take your money out. Some scammers will have a door-to-door campaign to market, for example, checking if your gas tank leaks. Some scammers will act as if they are testing your gas hose or gas tank to check for leaks, but at a time, they might be already inspecting your house for possible things that they could steal. So, as a consumer, it is best not to trust people instantly especially if your safety is at risk.
These are just some of the many strategies that insurance fraud companies do, and as for you and your family’s safety, it is best that you read and investigate first the history of a group that you are investing in. Moreover, also remember that insurance fraud companies can be jailed or be fined according to the Insurance Act (Act No. 2427) under the Presidential Decree no. 612.
As a consumer, it is best that you act and think wise before investing in a company. It does not mean that you are being overrated by the idea, it is just a native protocol when it comes to choosing a suitable insurance company for you and your family.
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