How to Identify The Fake Motor Insurance Policy

10 min read Posted on 17july 2025

The rise in fraudulent insurance cases has become a serious concern, affecting not only policyholders but also contributing to economic losses. According to the India Forensic Center of Studies, India faces annual losses ranging from $3.5 billion to $6.4 billion due to insurance fraud, with motor insurance fraud making up a significant portion of this figure (Source: Wikipedia).

The damage caused by these fraudulent activities impacts stakeholders, policyholders, and the economy as a whole. While it's impossible to completely eliminate insurance fraud, you can avoid falling victim by being cautious and informed. Many people are lured into purchasing fake or misleading policies, sometimes even from reputed companies, especially when buying motor insurance online. To help you safeguard against fraudulent car insurance policies, here are some essential tips.

Always Request a Receipt

A receipt is proof of your transaction and outlines the payment details. If fraud occurs, this document can be crucial for legal recourse. Always double-check the receipt to ensure that essential information, such as the company’s address, email ID, cheque number, bank account number, and IFSC code, is correctly listed. Missing or incorrect details may indicate fraudulent activity.

Ensure Your Signature is Authentic

Your signature on the proposal form is your legal identity. Never allow anyone else—whether an employee, agent, or nominee—to sign on your behalf. Forged signatures have become more common, particularly with online insurance purchases. Before signing any documents, verify details like the car model, registration type (private or commercial), fuel type (petrol, diesel, or CNG), and the car registration number. If anything seems inaccurate, report it immediately.

Verify the Insurance

One of the most reliable ways to verify insurance is by scanning the QR code on the insurance proposal form. Since 2015, the Insurance Regulatory and Development Authority (IRDA) has made QR codes mandatory to combat fraud. If you’re buying motor insurance online, check if the company provides a verification link. If they refuse or are hesitant to offer one, this could be a red flag. You can also contact the company’s support team or visit their nearest office to verify the policy's authenticity.

Look for IDV and NCB Details

Pay special attention to the Insured Declared Value (IDV) and No Claim Bonus (NCB) in the agreement. The IDV represents the total amount you will receive in case of a claim, while the NCB ensures no additional deductions if you haven't made a claim in the previous policy period. If you notice unexpected deductions or unclear terms in the agreement, it could signal a fraudulent policy. Never agree to deductions that aren’t explicitly stated and justified.

Verify Through QR Code

The Insurance Regulatory and Development Authority of India (IRDAI), which is the governing body of the insurance industry, has made it mandatory for every insurance policy that’s being sold to have a QR code. This code helps you to check the genuineness of the policy. You can scan the QR code on your smartphone by utilising a QR scanner app. Upon scanning the code, you’ll be able to view the status and the information related to your insurance policy.

Conclusion

To avoid falling victim to motor insurance fraud, it's crucial to take a proactive approach. Always verify the policy details, ensure your personal information is accurate, and double-check the legitimacy of the provider before committing. By being vigilant and aware, you can protect yourself from the growing threat of fraudulent car insurance policies.

Disclaimer: The content published in this article is intended solely for the readers' informational purposes and should not be relied upon for personal, medical, legal, or financial decisions. It is advisable to seek advice from a qualified professional regarding specific concerns. The details provided regarding the plan are for reference purposes only. Please visit the insurer’s website for the latest updates on the plan. The company does not guarantee suitability, reliability, timeliness, or accuracy of the information, services, or any other aspects mentioned in this regard for any purpose. We do not endorse any insurance company or insurance product provided by any insurer.