Sergey Solodky, head of the Roskachestvo Center for Financial Expertise, discussed the most common fraud schemes currently seen in the market.
Refusal to issue insurance under false pretenses
By law, any vehicle owner who has gathered the complete set of documents and is prepared to pay for an OSAGO policy should be able to obtain it at the insurance office on the day of application. Yet some insurers turn away potentially unprofitable customers, arguing that the paperwork would have been accepted by staff who do not have the authority to finalize an OSAGO agreement.
The Central Bank of the Russian Federation makes it clear that insurers are obligated to conclude an OSAGO contract with any eligible vehicle owner, regardless of whether the specific employees involved have authority. In plain terms, the company must sell the policy.
However, refusing to issue a policy can lead to penalties under Article 15.34.1 of the Code of Administrative Offenses of the Russian Federation, labeled as an Unreasonable refusal to issue a public insurance contract or the imposition of additional services when concluding a compulsory insurance contract. Officials can face fines from 20,000 to 50,000 rubles; legal entities from 100,000 to 300,000 rubles. Complaints about insurers can be filed with the Central Bank of the Russian Federation.
Termination of the OSAGO contract after payment following an accident
Consider a scenario where, after a car accident, the vehicle is declared a total loss, the insurer pays compensation, and then unilaterally terminates the OSAGO contract due to a claimed constructive loss of the car. The driver is not informed. Later, the owner may repair and reuse the vehicle. If a new accident occurs caused by another party, the recovering insurer may direct the claim to the other party’s insurer. If the driver is at fault in a subsequent incident, the victim may be denied payment.
The recommended action is to ensure the contract is not terminated and, if it has been, to secure a new policy promptly.
Refusal to repair or sending the vehicle to another city for repairs
Under a Casco policy, the insurer may require repairs after a collision, but that does not guarantee such repairs will be performed. The company might claim it has no agreement with an authorized dealer, even if the contract states otherwise, or it might direct repairs to a distant service point that cannot handle the job. In some cases, it may even instruct repairs at an out-of-town service station miles away. This is improper, and customers have every right to file a complaint.
Postponing deadlines and reducing payments
After an accident, a vehicle owner may approach the insurer and receive an application, yet without clear conditions for processing and payment. The insurer might intentionally delay the outcome to pressure the motorist into proceeding with repairs. This delay can justify a denial of insurance coverage in some cases.
Another tactic involves offering a small interim payment labeled as compensation to avoid waiting for a formal assessment. The catch is that the offer typically does not cover the actual repair costs. Prospective clients should not rush to sign waivers, as insurers are required by law to investigate the incident and determine payment amounts within the prescribed period.
Trick after assessment
Following an investigation, some insurers request signature on an agreement to determine the damage amount, which often results in a figure below the real cost. A vehicle owner may sign it to receive a quicker payout, only to discover later that the settlement fails to cover repairs. In such cases, recovering the shortfall from the insurer becomes impossible.
Owners retain the right to conduct an independent damage assessment, file a claim, and submit it to the insurer. The company must review the claim documents and render a decision within five days. If the insurer refuses to pay or undervalues OSAGO damages, contacting the financial ombudsman for assistance is advised.
A note: Depositphotos