According to the Times of  India Report, about 15% of insurance claims in India are fraudulent. Insurance fraud is on the rise, especially as more services move online.

The impact extends beyond financial losses—it drives up premiums, making insurance costlier for everyone, and in some cases, even limits access to coverage.

In this blog, we’ll explore

What is Insurance Fraud?

Insurance fraud includes deceptive practices that could be adopted by both policyholders and insurers, leading to significant financial and legal consequences.

Types of Insurance Frauds

  • Fraud by Insurance Providers: Some insurers engage in unethical activities such as selling policies from fake companies, misappropriating premium payments, or manipulating policies to earn extra commissions.
  • Fraud by Policyholders: This can include exaggerated claims, falsified medical histories, backdated policies, viatical fraud, and even staged deaths or kidnappings to claim benefits wrongfully.
  • Staged accidents - Here, fraudsters deliberately cause or fake accidents to claim insurance money. This may involve intentionally crashing vehicles, pretending to be injured, or falsifying witness statements and medical reports.
  • False or inflated claims, where individuals exaggerate damages, claim pre-existing issues as new, or inflate repair and medical bills to receive higher payouts.
  • Ghost policies and fake agents, where fraudsters pose as legitimate agents and sell fake insurance policies. Victims often realize they have been scammed only when they try to make a claim.

Tips to save yourself from fraudulent activities

Reporting Fake Accidents

A common type of insurance scam involves individuals deliberately causing accidents or falsely claiming one occurred to profit from fraudulent claims. Common tactics include staging collisions, faking injuries, or tampering with evidence at the scene. Once the setup is complete, they demand compensation for vehicle repairs or injuries that never actually happened.

Beware of Staged Accidents & Fake Claims

A common insurance scam involves individuals intentionally causing accidents or fabricating incidents to make fraudulent claims. Be cautious while driving, and if you’re involved in an accident, gather proper evidence like photos, witness statements, and police reports.

Keep Your Personal Information Secure

Fraudsters often attempt identity theft by stealing personal details like insurance numbers, bank details, and identification documents. Never share sensitive information over the phone or email unless you’re sure of the recipient’s credibility.

Report Suspicious Activities

If you suspect fraud, report it to your insurance company or regulatory authorities. Most insurers have dedicated fraud prevention teams to investigate and take necessary actions.

Stay Informed About Common Scams

Being aware of common fraud tactics can help you stay prepared. Keep yourself updated about emerging scams and share this knowledge with friends and family.

Choose Secure Payment Methods

Avoid paying insurance premiums in cash, as it poses risks like theft and a lack of proof. Instead, use secure options like online payments, credit/debit cards, or bank transfers to ensure a safe and transparent transaction record.

Steps to Lodge a Complaint Against Fraudulent Activities

Report to the Insurance Company

  • If the fraud involves an insurance policy or claim, report the issue to the insurance company first.
  • Contact the insurance company's Grievance Redressal Officer (GRO) (refer to their official website for contact details).
  • Submit a written complaint with all supporting documents.
  • Obtain a written acknowledgment of your complaint.

Next Steps If Your Complaint Is Not Resolved

If your complaint is not resolved within two weeks or if you are dissatisfied with the insurer’s response, you can escalate it to the Grievance Redressal Cell of IRDAI through the following methods:

  • Online: Register your complaint on the Bima Bharosa System: https://bimabharosa.irdai.gov.in/
  • Email: Send your complaint to This email address is being protected from spambots. You need JavaScript enabled to view it.
  • Phone: Call the Toll-Free Number 155255 or 1800 4254 732

Bottom Line

Insurance fraud is a serious issue that can lead to financial losses and legal troubles. By staying informed, verifying details, and reporting suspicious activities, you can protect yourself and contribute to a fair insurance system. Stay cautious, and always choose honesty when dealing with insurance matters.