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Old 17th February 2010, 15:34   #1
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Default Beware of Fraud Insurance Agents - My experience with Reliance General Insurance

Hi All,

This is my experience with Reliance General Insurance. A case of pure Insurance mis-selling.

It dates back to July-August 2009 when my 2007 Swift's car insurance was about to get due, that i started receiving calls from insurance agents from all over. After negotiating with a couple of them, I zeroed in on Reliance General Insurance for two reasons:
  1. I had Reliance insurance on my brother's Optra and they provided hassle-free claim when it was needed.
  2. Reliance offered the lowest quote, which made me somewhat suspicious, but was convinced by the agent that he was offering additional discount to build a relationship (even other agents were surprised at the quote).
I decided for the Reliance insurance. I was very particular about the heads in the premium details viz. NCB, driver insurance, passenger insurance, basic liability etc. and made sure no Voluntary Excess clause was there. Agents generally misinform the customers by claiming to quote the lowest premium but then adding this "Voluntary Excess" to the policy, which lowers the actual premium and hence they recover the discount offered.

The agent issued the cover note. I made sure he wrote the premium computation (Some agents just mention the total premium amount and not the itemised calculation).

However, when i received the policy, my initial suspicion was proven right. There was a Voluntary Excess clause for the value of Rs. 2500 (which was equivalent to the additional discount that he offered me on the premium)

I registered a complaint with the company in September and the company admitted the mistake after I presented the cover note. They traced the agent and recovered the money (atleast the sales manager claimed that).

The next step was to get an endorsement on my car policy and that is where the problem started. The manager informed me that the underwriters were not doing it.

The whole thing got dragged to Jan '10 and involved repeated complaints and follow-ups with the company.

Then I thought of checking the IRDA website (the authority that regulates all the insurance companies) and see if i could register a complaint for the same. There is a provision and I instantly registered a complaint with IRDA (without any hopes I must say)

The Reliance guys who kept saying the underwriters are not doing it, came in action within 10 days of the complaint and the whole issue was resolved within 1 day. I got the endorsements by mail and in hard format as well.
Kudos to IRDA.

From my experience, I would say:
  • never trust these agents for what they say. Get everything in written
  • In case you file a complaint with the company and it seems that the issue is getting dragged, then report it to IRDA, for that helped me resolve the issue in my case
This might seem to be a small incident but I feel insurance mis-selling is one of the major concerns these days and on that thought I felt I should share it with u all.
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Old 17th February 2010, 16:28   #2
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Zappo, the policy becomes invalid when the cheque bounces. Our insurance principles say 'Cash before cover'. True that Reliance should have been diligent, however they may have a case if you did make a claim on that policy.
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Old 17th February 2010, 16:31   #3
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Amazing! I have had an almost similar experience on my insurance renewal last year. The premium quote for my 5 years old car that Reliance gave was far lower than any other Insurance company. I was also just as suspicious as you. But here the story has a different twist. There is no voluntary excesses, reduced IDV (another favorite trick of the agents) or any other sort of hanky panky anywhere. At least nothing that I can spot. It looks like they genuinely provided me that quote which I felt was very competitive. I wonder whether I really missed a trick somewhere!

Reliance by themselves are also an amazing org. They take over 7 months to realize that the issued cheque against a policy was dishonored by the bank. And then they go ahead and try to close the policy from the back date! Think of the complexities that may come if in the meantime someone actually made a claim. I wonder whether such practices are legally tenable as the cheque issuer may not have been genuinely aware of a problem but they, as the insurers who were getting the premium and issuing the policy against it, should have been more careful. God only knows how this organization really functions!

Originally Posted by Jeep View Post
Zappo, the policy becomes invalid when the cheque bounces. Our insurance principles say 'Cash before cover'. True that Reliance should have been diligent, however they may have a case if you did make a claim on that policy.
True... but there are a couple of points here.
1. As the bankers told me, the cheque did not bounce. It was declared time barred.
2. If that SMS had somehow not arrived I would have never known about it. Since it was not any violation of law the bank did not take any otehr measure to inform me about the issue except for sending that very vague SMS.

Under such circumstances if there was indeed a claim and it would have ended up in court then the question would have come up,
> The issuer of the cheque issued it in good faith.
> Since no communication was ever recieved by the policy holder from the bank that the cheque did not go through and also the insurer never ever informed the insurance holder about the same how could the person have known about the problem?
> Reliance with all its accounts and other ancilliary departments took 7 months to realize the gaffe. How do they expect the policy holder who even recieved a valid policy document after 2 months to know that the cheque did not go through some 1.5 months back?

I do not think it would have been so simple. By that logic Reliance can also wake up to some similar problem after a decade and claim for recoveries. But then unless they can prove an ill motive to defraud the organization I do not think their charges will stick so well. That is my view.

Last edited by Zappo : 17th February 2010 at 16:41.
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Old 17th February 2010, 17:10   #4
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You can listen to lot of this kind of stories with only two companies in India Icici and Reliance.

Fraud and cheating is the most important thing in company policy.
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Old 17th February 2010, 21:46   #5
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Default Avoid Insurance (any) from Reliance

Avoid Insurance from Reliance. My experience with them for a life cover was troubled right from the start. An agent from a reputed FI sold me a life policy for a cover of 14 lakh with a 20 k annual premium. After handing over the cheque there was no news from them for over 2-3 months and then when i call i was told my cover was reduced to 10 lakh for the same premium. i had to wait another month and a half and make endless calls to get the policy which was 1 lakh when it arrived!!!!

I was shocked and immediately cancelled the policy and vowed never to have anything to do with Reliance again.
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