Kumaravel (name changed) of Pudukottai wanted to renew the insurance policy for his truck and was surprised to know that Senthil Kumar, an authorised insurance agent, is charging just Rs 15,000 as annual premium which normally costs double the sum.
Mariappan and Senthil Kumar are among the six persons arrested by the Central Crime Branch in Chennai a few days ago for issuing fake policy to heavy vehicle owners, misusing the online facility provided by the insurance firms and by wooing them with cheaper premium. In Kumaravel’s case, there was no fatality involved, otherwise the family of the third person who lost his life would have got nothing.
However, police officers say that there have fatal incidents too, but insurance companies did not take it up as it would mean projecting themselves in a bad light. Until a few years ago, buying a policy would mean physical inspection by insurance officers and collecting details in person. However, with the introduction of buying insurance policies for two-wheelers and personal cars, there is no mechanism in place to verify the vehicle particulars. The fraudsters would buy a two-wheeler insurance policy by entering a truck’s registration number. All they have to do is get change the premium sum and give it to the vehicle owner.
“Some companies do check the credentials, but most of them do not do it because they have spent extra for each policy. For the premium vehicle owners, all they get is an unsecured bond issued by the firm, which will have a role to play only when there is an accident. Otherwise, there is no communication between the companies and the vehicles until it’s time for renewal of the policy,” said a police officer who was part of the investigation team that busted the racket.
While representatives of insurance companies reportedly told police officers that they cannot check each of at least 50,000 policies they sell every day, police are of the view that linking the insurance portal with government’s online vehicle database, ‘Parivahan’, would make it impossible for fraudsters to indulge in such crimes. But the insurance providers are hesitant to do it for some reason, though they cite the commission they have to pay to the government for each policy. “It is said that insurance companies have to pay to Rs 20 to the government to verify the vehicle credentials, but they levy charges on the customers to avoid a scam,” said officials.
Lorry owners easy target, thanks to high premium
It’s not that such scams are new to heavy vehicle owners. However, they are taking newer forms, said Yuvaraj of Tamil Nadu Sand Lorry Association. “Earlier, agents used to cheat us by issuing policies meant for construction equipment. In our association, we have streamlined the vehicle insurance process, so that the members do not fall victim to cheaters. But many truck owners who are not part of the association get cheated as they want to reduce the cost of vehicle maintenance.
“Skyrocketing vehicle insurance premium is the reason for naive truck owners falling victims. About 20 per cent of heavy vehicles run without valid insurance. The government should regulate insurance companies in such a way that that the victims are suitably benefited instead of their claims being rejected citing some loopholes. The government should also reduce the insurance cost for heavy vehicles,” said Yuvaraj adding premium for heavy vehicles comes between Rs 40,000 to Rs 54,000.
A senior IAS official in the transport department said they have sought a report from the police about the scam and would write to the transport ministry and Insurance Regulatory and Development Authority (IRDAI) about the feasibility of linking the insurance portals with government’s vehicle database.