What is Premium Diversion In Insurance

Insurance generally refers to the exchange of risk for money. Consumers pay premiums to insurance agents/companies, and the insurance agents/company issues an insurance policy that determines certain risks that they will bear. For example, in a typical car insurance policy, the insurance company will pay the insured driver a certain amount of accident compensation under certain circumstances. When the insurance company receives the money in the form of premium payment, the driver can rest assured that the accident will not cause him economic losses.

Insurance fraud refers to a person who uses false excuses, false statements about important facts, or other fraudulent behaviours to engage in the course of actions aimed at obtaining money or other valuable items from an insurance company, an insured, or an enterprise. Like other fraud crimes, the term "insurance fraud" covers a wide range of schemes. State laws generally target certain forms of insurance fraud. The federal government can investigate and prosecute insurance fraud under the mail and wire fraud regulations.

Premium Diversion is basically a kind of insurance fraud where insurance agents fails to submit certain premium payment that customer pays while adopting the policy, to the underwriter insurance company and uses those payments for him/her self personal use. Premium diversion could also be done by the insurance companies where they fail to cover the certain incident that occurred [like an accident]. It is illegal act on the part of either the buyer or seller of an insurance contract. Few year back I was the victim of such kind of fraud. I opted for insurance from the agent Mohammed Niraz Buhari who owns insurance firm now. He convinced me to opt for the policy and year later through my bro - in - law it came to my knowledge that I was being defrauded by my agent. He introduced me to the term Premium Diversion.