Insurance - Insurance fraud

Is it possible that insurer or agents sale fake policy or do not crediting the premium amount to my insurance policy? what kind of fraud it is, soft or hard? Is there any real cases occurred regarding this?

As to what kind of fraud this would be, we're outside my area of knowledge. My wife has an uncle who owns a bar. It burned down one night after cigarette butts were not properly disposed of at closing time. That's when he found out his insurance agent had been pocketing the premiums. There's now a civil suit against the insurance company and a criminal one for the agent. So yes, this unfortunately does happen. Just for CYA purposes, it does look like the insurance company is going to stand behind my wife's uncle because he has documentation of his payments to the agent.

I personally know of a few cases regarding this. One agent I know went to jail. Fortunately there were no large claims to worry about. Some ways to protect yourself are:
*take copies of EVERY DOCUMENT you sign, and make sure your agent signed them as well.
*Always pay by check/credit card (for documentation purposes) and get a receipt when paying your premiums in person. It would be best to pay premiums directly to the insurance company.
*Choose your agent carefully. Ask lots of questions.
*Remember that "cheaper" doesn't always mean "better" when purchasing insurance. Many of the "cheap" companies don't have procedures in place to prevent this type of fraud.