How To Tackle Insurance Frauds Effectively

Things You Need to Know Before Buying Car,House, Health & Life Insurance online.

Insurance Buying Tips #1: Shop smart
When looking for insurance, your No. 1 priority should be to find adequate coverage. Price is important, but you’ll want to determine what kind of coverage you need first. Then you can fit that coverage into your budget and determine which carrier can provide you with the most comprehensive policy for your situation. You may be tempted to choose insurance with the lowest price tag, but if you don’t have enough coverage (or the right kind of coverage), you will see less financial benefit when it comes time to file a claim.
Insurance Buying Tips #2: Look for discounts
Once you evaluate your coverage needs, factor in your budget and find ways to save. Ask your insurance agent if there are any discounts on your coverage. Often, carriers offer discounts for things like paying your policy in full, staying auto accident-free or, if you’re in school, getting good grades. You also can save money by “bundling” multiple policies, such as purchasing a home and auto policy from the same carrier.
Insurance Buying Tips #3: Fill in the gaps
An average policy will cover the basics, but you may need to add extra coverage to meet your unique needs. For instance, you may have items like electronics or a nice piece of jewelry that would be financially difficult to replace, even with the assistance of your average renters or homeowners policy. You may want to add additional coverage for these items.

Insurance fraud is considered as one of the biggest challenges which insurers are experiencing worldwide. Reducing the claim payouts is the best mean to improve efficiency and decrease cost because pricing pressure is leading to slow economic growth. The industry's overall success is mainly based on the manner insurance companies in India treat their claims; for majority of insurers claim processing efficiency is their unique selling propositions.

Decreasing claim leakages by fighting against insurance frauds effectively and maintaining a larger focus on recovery management can definitely support insurance companies in India to decrease their claim cost. Below are the five key areas that should build an effective fraud management strategy:

  • Underwriting Prudence

Fraud and claim management begin much before the claim incident is registered. Different indicators can raise suspicion during the underwriting procedure. Once the claim is settled, the data of claims can affect the rating and underwriting functions positively. It is essential to incorporate more details into the underwriting process. It is necessary to use information responsibly during the analysis of underwriting because it is the most powerful fact against insurance fraud.

The insurer should gather enough information about its prospective clients to identify fraudulent intentions starting the reviews of sales application. Insurance experts suggest to dig more to verify identity as well as every proposal should be scrutinized individually. Do not forget the main purpose of decreasing claim leakages from the beginning and hence, activate the fraud fighting mechanism from the first step.

Insurance Buying Tips #4: Purchase life insurance—you aren’t too young
Life insurance is essential, no matter how young or old you are. And for millennials, buying now may be a smart move because it’s cheaper to buy a life insurance policy when you’re young and healthy. This kind of insurance can help your family cover unexpected costs in your absence, including student loan debt or a mortgage, in addition to end-of-life costs. And if you have kids, a life insurance policy can also support their education or childcare expenses. Additionally, every millennial should consider long-term disability coverage, which helps you stay afloat financially if an accident happens and you become disabled and unable to work.
Insurance Buying Tips #5: Talk to an independent agent
An independent insurance agent is an essential resource when purchasing insurance—especially if this is your first time. An independent agent works with multiple different carriers, which is different from captive agents who can only sell insurance from the carrier they work for. Working with an independent agent can help make sure that you are getting the best coverage, for the best price. You’ll also benefit from independent agents’ insurance knowledge; they know how to talk you through your options and actually explain what each policy includes. An independent agent will make sure all of your assets are covered, help you find discounts or other ways to save, and be a valuable resource as your life changes and your insurance needs change, too.
Insurance Buying Tips #6: Only buy insurance to maintain your existing standard of living
You don’t need insurance for events that won’t severely strain your finances. Start with your basic needs (home, auto, business), then work your way to include other needs (cyber, liability). You can always obtain coverage later for something if you change your mind. You can minimize your risk and maximize your savings by buying insurance that won’t cause you to break the bank.
  • 'First Notice of Loss' Management

From a fraud perspective, effective handling of First Notice of Loss procedure is really complicated for insurance companies in India. But, insurers can identify the fraud cases because of enhanced workflow, access of automation and streamlining the procedures. Also, companies can find recovery possibilities earlier in the cycle of claims. There are several options insurers can use as early warning systems such as Voice Analytics for timely fraud identification. Various things can raise question on the reliability of the loss, including claimant's detail, claim reporting time and last but not the least, the manner in which claim is registered.

Delay in finding the fraud triggers can really have major consequences in the future. For instance, insurance companies in India may lose important eyewitnesses because of delay in SIU appointment and it can badly impact the fraud analysis as well as the recovery possibilities. If insurer fails to take strict action during this stage, then it will cause more than four times cost, time and efforts to solve the case. Insurers need to be active as compared to fraudsters to fight against fraud in an effective way. Efficient use of data analysis to filter the possible number of claims to be resolved against fraud is necessary. Insurance professionals pay more attention to those claims, where maximum chances of fraud exist.

  • Build Effective Claims Team

Developing effective team to handle overall fraud management is an important part that insurers need to complete. The company should select those candidates who have strong investigative skills to develop an effective SIU team for handling frauds.

Insurance Buying Tips #7: Ask your insurance provider what the policy doesn’t cover
Every insurance policy has perils that are not covered by your policy. These perils are referred to as “exclusions”, and every policy has them. Ask your insurance provider to explain the exclusions in your policy to avoid discovering what they are once you incur damages or a loss.
Insurance Buying Tips #8: Consider bundling several policies with one insurance carrier
here may be value in bundling several policies with one insurance carrier. If you’re looking to insure multiple vehicles or obtain multiple types of business coverage (e.g., liability, property, cyber), then you may want to consider obtaining coverages under one insurance provider who carries multiple products, and who may be able to offer you multi-policy discounts or loyalty programs.
Insurance Buying Tips #9: Review your insurance needs on a yearly basis
As your needs evolve, so will your insurance policy. Maybe you’ve acquired a new vehicle since obtaining auto insurance for your primary vehicle, or started operating your business out of your home, or experienced a cyber-attack during the year… Whatever the change(s), you’ll want to make sure you’re covered for any new risk exposures. Talk to your insurance provider to stay on top of your insurance needs.
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