How to Identify And Protect Yourself Against Insurance Fraud

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Insurance fraud can be perpetrated by fake insurance companies, legitimate companies that are not licensed to sell insurance, individuals within the insurance industry and even consumers themselves. As witnessed in the case of Evans Kasyoki. An employee of a legitimate registered well-known insurance company took out two life insurance policies on his nephew. Then killed him and sought to claim payment for the fruit of his crime.

The Kenyan insurance sector isn’t without problems. It is dogged with poor data management and poor scrutiny. Thus, the gaping holes in our system are making it so easy for criminals to slither without detection. As consumers of the insurance products, we can only be vigilant. Ask questions and be wary of suspicious insurance transactions to avoid being victims of this vice.

Below we have highlighted the ways to identify insurance fraud and how to protect oneself from it.

How To Identify Insurance Fraud?

Insurance fraud is very difficult to accurately detect. The very nature of the crime is subtle and very covert. Take the case of medical insurance fraud in Kenya. Most victims never learn they have been targeted until it is too late. Cartels within the medical profession are known to charge duplicitous medical services and drugs to your insurance. This makes it very difficult to detect until the card is maxed out on funds, leaving you confused on how that happened.

Here are some of the ways you can identify insurance fraud; early detection is key to prevent further loss:

(1). Demand for detailed statements from your insurer for repairs and medical services.  Also, ensure you verify them for accuracy.  This way you will pay for only the services you have received.

(2). Be apprehensive when approached with insurance prices that seem too good to be true.

(3). Don’t trust strangers who urge you to consult certain (very specific) medical professionals or attorneys; maybe part of a fraud ring.

(4). Stay on guard when you get unsolicited visitors or callers asking for your personal information.

How Can You Protect Yourself?

It is no mean feat to prevent insurance fraud. To reduce the risk of being a target of insurance fraud, here are some ways to protect yourself:

(a). Be an informed consumer – educate yourself about all your insurance products and learn your vulnerabilities.

(b). Don’t volunteer sensitive information about yourself to unsolicited visitors or callers – criminals are also known to befriend their victims too.

(c). Avoid signing blank insurance claim forms.

(d). Get a copy of your insurance policy – read it, understand it and know exactly what is and is not covered.

(e). Always get proof of payments- never make payments to the individual agent or broker, and always request a receipt.

(f). Purchase insurance only from a licensed agent – contact the insurance regulator to verify that the agent and company are registered.

(g). Get a biometric card for your health insurance to prevent fraud.

(h). Document (in pictures) all the damage gained from a car accident –  this makes it difficult for the other driver to pin more damages later for a higher claim.

(i). Get contact information, license plate number, driver’s license number, proof of insurance and detailed billing information i.e., recipients for all medical services and car repairs, as required.

(j). Avoid discussing anything about the accident on the scene and do not admit fault or place blame.

(k). Obtain detailed billing information and receipts for all medical services and car repairs.

All In All

At the end of the day, people will always be people. Therefore, there is no perfect deterrent to insurance fraud.  To many, the crime may be victimless but at the end of the day, someone may lose their life. The greed of the perpetrators continues to expand. Let’s be vigilant and wary of any suspicious behaviour when handling insurance matters.

Protect yourself and others.

Happy Building!


Image credits via Pexels.

Meanwhile, You can click on the following links to read more about financial planning:

5 Ways to Use Your Life Insurance Benefits

6 Big Risks to Your Financial Success

3 Ultimate Strategies For Financial Prosperity

Red flags For Investment Fraud & Common Persuasion Tactics

What You Can Do to Avoid Investment Fraud

8 Most Common Investment Frauds You Should Avoid

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Irene Makanga
Irene has an MBA in Finance and is an avid businesswoman, passionate about financial literacy.

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