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24 January 2023

Avoiding Insurance Scams in Hong Kong

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As much as the Hong Kong Insurance market is regulated, scams and fraud will still happen.

At CCW Global, we believe that understanding the different types of insurance scams present in the market is crucial for individuals and businesses to protect themselves from financial loss.

Being aware of these scams and how they operate can help individuals and businesses make informed decisions about their insurance coverage, and help you to take steps to safeguard your assets. It is important to have a philosophy of being vigilant and informed in the insurance market, rather than being ignorant and falling prey to fraudsters.

At CCW Global, we strive to provide our clients with the knowledge and tools they need to navigate the insurance market and make informed decisions about their coverage.

“Ghost” Brokers, Agents, and Underwriters

One of the biggest risks in the Hong Kong insurance market is the issue of “ghost brokers.”

A “Ghost Broker” is where a scammer poses as a legitimate insurance broker or agent, and “sells” fake insurance coverage to unsuspecting victims. With a Ghost Broker, or Ghost Agent, a victim may believe that they have purchased an insurance policy (even having paid premiums) only to discover that the company they were dealing with does not exist.

As silly as it may seem to be worried about a “ghost broker” this type of scam is more common than you may think.

In fact, in 2017 CCW Global was the victim of scammers pretending to be our company by using the website “C C V V -global” to try and solicit individuals to purchase insurance. In this instance, a customer notified us of the scammer and we were able to inform the police and the Hong Kong Insurance Authority to stop any criminal activities before damages occurred.

However, this illustrates that the problem of Ghost Brokers is all too real in Hong Kong and that an unwary policyholder can all too easily fall victim to an insurance scam.

Insurance Broker Regulatory Information

Insurance Regulation in Hong Kong

In order to avoid Ghost Brokers or other fraudulent insurance “providers,” it is important that you check and investigate any insurance company you are thinking of doing business with.

All authorized insurers and insurance intermediaries in Hong Kong must provide their regulatory details on all of their marketing materials – including on their websites. In the case of CCW Global, our regulatory information is clearly highlighted at the bottom of every page of our website, and on all emails you will receive from our company. Further to this the Hong Kong Insurance Authority maintains a register of all licensed insurance intermediaries in the territory that can be used to confirm that you are dealing with a licensed and reputable organization.

As an extra layer of security look to see if the insurance company you are considering provides any complaint information. It is highly unlikely that a fraudster will identify your legal options in the event of a complaint, but in the case of all admitted insurance intermediaries, this information should be displayed on their website. For CCW Global, you can identify where to make a complaint on our terms and conditions page.

Hong Kong Insurance Claims Fraud

Another common insurance scam in Hong Kong is known as "claims fraud."

This type of fraud involves individuals or businesses making false or inflated claims to their insurance company in order to receive a larger payout. This can include exaggerating the extent of damages or injuries, or even staging accidents or incidents to make it appear that a claim is legitimate.

Under Hong Kong law this is highly illegal.

Due to the principles of insurance, a policyholder cannot receive any “betterment” under a standard claim. Simply put, a claim should not result in a policyholder receiving more in compensation than they have lost. Attempting to receive more in a claim than you have lost under the insurance is fraud, and will be prosecuted should it be discovered.

Insurance companies have various methods to detect this kind of fraud such as using fraud detection software, using specialized investigation team, or even using private investigators to investigate suspicious claims. There are many types of claims fraud, but the most common normally relate to car insurance.

Avoiding Claims Fraud in Car Insurance

The easiest way to avoid car insurance scams in Hong Kong is to involve your insurance company at every stage of your claims process. If you have been involved in a car accident, no matter what the other party says you should always call the police and your insurance company as soon as you are able to do so.

By involving your insurer, they are assuming any financial liability you may have held for the accident, and can work to protect you from issues like body shops quoting extreme repair costs. Additionally, your insurance company will have access to reputable repair shops, and claims adjusters to ensure that you will be getting your money’s worth.

Avoid Insurance Scams in Hong Kong

The best ways to avoid an insurance scam in Hong Kong are:

  • Ensure you are working with a licensed insurance company or intermediary
  • Inform your insurance provider as soon as possible in a claim situation

If you are ever concerned that the insurance company you choose to work with is fraudulent, simply conduct a search on the Hong Kong Insurance Authority website to get all their relevant information.

If you have any questions about insurance in Hong Kong, or any of the different types of Hong Kong insurance scams that you may encounter, please Contact a CCW Global Broker Today.

We’re simplifying your insurance.

About Author

Michael Lamb is an insurance industry professional with many years of experience within the Hong Kong Insurance market. Focusing on APAC coverage issues, Michael is able to provide extensive analysis and insight to a range of pressing topics. Previously, Michael provided insurance broker Globalsurance.com with their most highly valued articles and was a key influence in the development of all the content on Pacificprime.com, Michael has a passion for insurance matched by few others in the region.

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