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Old 22nd May 2020, 12:06   #1
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Default Indian car owners damage their cars for bogus insurance claims

Thanks to the Team-BHP fan (he prefers to remain anonymous) who sent these video links in. Heartfelt gratitude for sharing them with other enthusiasts via this page!

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Greetings for the day !

Being active on social media, I have noticed a lot of people are putting up videos of purposely damaging their cars to claim insurance. It came to my mind that a thread should be created on Team-BHP, wherein BHPians post such videos while mentioning the vehicle number if visible in the video.

The link should be shared with relevant insurance companies then they could deny such claims and even blacklist the vehicle owner for renewing insurance with them in future.

I think this would help insurance companies by reducing the financial loss occurred due to fake insurance claims and it may help customers like us to get genuine claims approved faster and with a bigger amount, or result in more profit for the company, which could declare and give more dividend to their shareholders.
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It is mandatory to insure every car in India. Each year, an owner pays sizable sum as premium to renew his insurance policy. In the event of an accident, the insurer will bear most of the cost of the repairs undertaken on the car. The owner too has to pay, but it is a relatively small sum of money.

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The vast majority of people do not have any ill intentions and file an insurance claim with the insurer only if the car suffers damage due to a genuine accident. However, there are some who have other ideas. They intentionally damage their cars to claim insurance.

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Most of the time cars are damaged intentionally when the written down value of the car exceeds the amount the owner would get if he sells it. There are instances when the car is just difficult to sell or unreliable and becomes a white elephant. In such cases, the owner might want to write the car off as a total loss and get the maximum amount he can for it from the insurance company.

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In other cases, the owner might want to get some work done on the car, but does not want to spend the large sum of money required for it. This includes repairing some old damage. As an example, a coconut may have fallen on a windshield, but the owner may not have noticed the damage as it may have been negligible. With time, the crack in the glass would have grown and by the time the owner lodges a claim, it would be too late. The insurance surveyor will not pass the claim as the accident would be classified as too old. In this case, fresh damage on the windshield would enable the vehicle's owner to have his claim passed.

Here are some videos of people intentionally damaging their vehicles to claim insurance.

Last edited by Aditya : 22nd May 2020 at 12:07.
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Old 22nd May 2020, 12:09   #2
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Default Re: Indian car owners damage their cars for bogus insurance claims

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Old 22nd May 2020, 12:20   #3
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Default Re: Indian car owners damage their cars for bogus insurance claims

Linking to another recent insurance fraud case : BMW stolen while drunk man stops to urinate. EDIT: It's a fraud (page 2)
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Old 22nd May 2020, 13:35   #4
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Default Re: Indian car owners damage their cars for bogus insurance claims

Is there a mechanism that insurance companies can use to check for such bogus claims? The nerves of some people to commit fraud and then advertising it on instagram!
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Old 22nd May 2020, 13:47   #5
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Default Re: Indian car owners damage their cars for bogus insurance claims

Stupid enough to do this intentionally, stupider to broadcast it on social media. It's a miracle these idiots remember to breathe.

Makes life difficult for all insurance customers, who end up paying higher premiums and get harassed even with genuine claims.
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Old 22nd May 2020, 13:59   #6
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Default Re: Indian car owners damage their cars for bogus insurance claims

I think all insurance claims should be settled after filing an official police complaint which is followed by a swift investigation and then clear onus of the error lies on the person at fault whose insurance company has to settle both the bills and charge him heavily when renewing next time. This is what brings down the cost of insurance.

It requires a transparent law and order situation which doesn't exist in our country.

As a result, insurance companies do what they like since owners don't want to go through the trouble of a lengthy and corrupt investigation situation after an incident. I believe 90% of the claims in India have a bogus story of the incident involving an untraceable participant since it is convenient.
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Old 22nd May 2020, 14:04   #7
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Default Re: Indian car owners damage their cars for bogus insurance claims

I doubt folks do this just to claim insurance but to get more likes/viewership for their videos. I don't seem anyway the owner would gain. Unless you have a grudge on insurance company, no one would do this.

-One has to anyway pay a premium which is non-refundable.
-In any accidental claim, owner will pay atleast 2-3K from pocket. If no Zero Depreciation, you have shell out more.
-You lose out on NCB.
-Car with accident/replaced part depreciate more.

Last edited by PrideRed : 22nd May 2020 at 14:05.
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Old 22nd May 2020, 20:39   #8
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Default Re: Indian car owners damage their cars for bogus insurance claims

I'm in the insurance business, let me put in a few points.

There are a few who actually damage their cars intentionally to make a bogus claim, but there are many who actually try to increase the original damage in case they are filing a claim. For example : (1) You end up damaging both the right side doors of your car, the body shop advisor will most probably suggest that he will increase the damage to the fender and the rear quarter panel so as to avoid any paint mismatch on the right side of your car. (2) There are some scratches on your windshield and you decide to replace it, simply chip a small part of your windshield corner and claim damages. (3) You end up ramming the front portion of your car(damage to the front bumper, a headlight, etc) and you also have a battle scar on your rear bumper from a past mishap- simply state that multiple vehicles collided and everything gets fixed. Such situations are usually a win-win for the customer as well as the target-driven body shop advisor. Of course, there are many gentlemen( customers/ body shop advisors) out there too who simply refuse to give in to such acts.

The insurance surveyors are extremely overburdened due to their workload and they have a responsibility to settle all claims before the month-end. Even though they are aware of such practices at the workshop they usually just let it pass and try to close the file as soon as possible.

Some insurance surveyors also make calls to their regular/known workshops requesting them not to register any claims during the last 4-5 days of the month. They usually give an informal approval to start work on such cars and then ask the workshops to register the claim on the 1st of the next month.

While some suggest that the insurance companies should start making detailed inquiries into all claims, that would do no good as it will significantly increase the time process to clear all genuine claims. They could rather select random cases like one in a hundred if they wish to. But making detailed inquires into all claims will be a hassle and also increase costs for the company.

Regarding the Police complaints, I'm sure anybody who has been through this ordeal wouldn't want to go through it again

I'm in no way promoting the above actions but this is, unfortunately, the truth of this industry.

Plus there are many of us on Team-Bhp itself who love to mod their cars with a remap, sportier suspension, downpipe's, bigger tyres, etc. We all should probably then give up on our Insurance. Would we??

While the above-mentioned points highlight some drawbacks of the insurance system I'm also equally very happy to report that there is almost zero corruption in the system, especially the surveyors are usually nice to deal with and are willing to help out the insured and cover the maximum under insurance(sometimes even if it is not related to the claim)

Needless to say that the insurance companies are no saint either. Few examples like Reliance deducting 10% as salvage for metal parts in zero- dep policies, Royal Sundaram giving unreasonably lower labour costs/ delayed payments, Tata Aig denying renewals are some of the examples.

Insider tip - The maximum number of claim rejections nowadays is due to the declaration of wrong NCB during renewals. Please be sure that you always declare the correct NCB applicable in your case.

Last edited by Aditya : 24th May 2020 at 06:10. Reason: Small typo!
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Old 22nd May 2020, 20:57   #9
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Default Re: Indian car owners damage their cars for bogus insurance claims

In my view, it is not the scam from owners but the insurance companies themselves.

Insurance companies are creating these stories for real claims and posting them on social media and giving publicity

What will the insurance company gain?
If this story spreads and gain momentum in public, then people start trusting such stories. Then the insurance company can increase the rejections giving reasons as fake claim.

Then, if a owner puts up his real claim rejection story blaming the insurance company, the company don't get trolled because, people would have already believed that such fake claims are done earlier.

Why car owners do not prefer fake claims?
Reason is simple. Entire world knows IDV Value is always lesser than market value of the vehicle.

90% of sales happens with Selling price of the car greater than IDV of the vehicle. (My gutt feel and experience of selling my cars. I don't have statistics)

Moreover, even if IDV is say 1 lakh, the scrap value insurance company gives is only 70 to 80% of the IDV.

Last edited by gkveda : 22nd May 2020 at 20:59.
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Old 22nd May 2020, 21:09   #10
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Default Re: Indian car owners damage their cars for bogus insurance claims

This is nothing new.

It's been happening ever Insurance companies started operating in India and applies not just to cars but every form of insurance.

Factories are burnt when business is bad, so are offices, generators are damaged, plant and machinery made to appear as if they broke down to claim MBD insurance etc.

Insurance companies were absorbing the losses initially but now it's got to such a scale that they can't anymore. This is why premiums keep increasing.
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Old 22nd May 2020, 21:15   #11
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Default Re: Indian car owners damage their cars for bogus insurance claims

This is not at all a recent phenomenon. I have witnessed this being done by authorized workshops to get whole of one side of car to be repainted/replaced. Many a times it’s done to get a new door, bumper, headlights etc. If they can’t match the factory finish they will resort to such antics and it’s known to insurance companies. I was told to damage one door extra way back in 2002, which I declined and I was left with a mismatched door paint with bubbles. I was ok with the color difference but many people are not.
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Old 22nd May 2020, 22:45   #12
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Default Re: Indian car owners damage their cars for bogus insurance claims

I suspect all the posted videos are from dealer premises.

Think about it, who gains due to higher bills? The customer doesn't pay anything extra, and any inflated bill goes straight to the dealer. More so if its a new car with zero dep, or glass part (windshield etc.)

People may do it on their own as well, as Insurance frauds are probably as old as the industry itself, but these videos to me, don't appear like the owners doing it themselves.
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Old 22nd May 2020, 23:07   #13
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Default Re: Indian car owners damage their cars for bogus insurance claims

So it is done for insurance claims.

Scrolling through the trending section of Insta, I came across these Tiktok kinda videos where they just rammed Scorpios into trees again and again, with the usual cringy music, I was like 'these guys would do anything for views'

Then I came across the same being done to Fortuners and other more expensive cars.

Insurance didn't cross my mind, cause if they go public, then this can be held against them, right?

Stupid me. They could very well upload the video after the claim and repairs are done

Last edited by Sheel : 23rd May 2020 at 15:28. Reason: Please proof read prior to submission and use spell-checkers. Thanks.
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Old 22nd May 2020, 23:08   #14
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Default Re: Indian car owners damage their cars for bogus insurance claims

Wrong to blame the customer here. Most probably the garage/workshop would suggest the customer to do the additional damage for their benifit of higher billing and ease of matching the paint on panels.
I had an insurance claim way back in 2004 where they replaced the entire door instead of the tinkering work which was a bit tedious in the way it was damaged. The advisor spoke to me as if they had replaced the door free of cost and had done a favour to me.It is easier for them and less time consuming too.
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Old 23rd May 2020, 01:32   #15
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Default Re: Indian car owners damage their cars for bogus insurance claims

Whereas I am sure there are all sorts of insurance scams out there, I somehow find it difficult to imagine these scammers would put their efforts out on social media for everybody to see. It doesn’t add up.

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