Planning to buy an insurance policy? Be aware of these pitfalls

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In the past few years, technology has drastically changed the way we purchase products and services. There is an app or seamless online platform available for banking, stock market investments, payments, etc. The coronavirus pandemic has given a big boost to the digital revolution and even paper heavy, agent dependent insurance purchase also went digital.

Most insurers offer the online and tele mode for marketing, sourcing, selling and servicing insurance. While this brought safety and convenience to potential buyers, it also exposed gullible citizens to fraudsters.

Recently, the Insurance Regulatory and Development Authority of India issued a warning against dealing with a Bangalore-based entity – ‘Digital National Motor Insurance’. Irdai said in a public notice that the said insurance company has not been granted any license or permission to sell insurance. Individuals should remain alert and not fall prey to the fraud being committed by this fake motor insurance company.

It is indeed a scary and harrowing news for the individuals who might have bought a policy from this entity. So what can we do to ensure we do not fall prey to such fly by night operators and online frauds while buying insurance? How do we choose an insurer, before we choose a product that suits our needs?

Name, reputation and size of the insurer:

Always do online research about an Insurer, it’s history, how long it has been in existence and asset size. It will give an idea whether the company is stable and over the years will it be able to service the policy claims. You should also check if the company is recognised and licenced with the insurance regulator. List is available on IRDA site or the website of General Insurance Council.

Online customer reviews and complaints:

Always check the customer reviews posted online, it will give you an idea about the company’s services and claims process history in general. It will also indicate if there is any kind of fraudulent activity and major red flags.

Do not get lured by low premiums:

Most fraudsters lure public by offering low priced products or freebies. Most of us have a tick the box approach towards buying insurance of any kind. People look at lowest premium being offered for a particular product and then look at other benefits. Compare the benefits being offered and see that none of the important parameters are not left out in an attempt to buy the cheapest cover.

Do not share personal information:

With majority of buying decisions shifting online, it is not uncommon to let our guards down. Do not take decisions, click on links or provide personal information before verifying a caller’s identity and before doing your own research about the company. A polished sweet talker on the phone may not always be genuine.

(The writer is director and founder of RIA Insurance Brokers. Views expressed are personal)