Insurance fraud has a hugely negative impact on Canadians and the insurance premiums that they pay. Wikipedia defines Insurance fraud as “any act that is committed with the intent to fraudulently obtain some benefit or advantage to which they are not otherwise entitled”.
The Insurance Bureau of Canada estimates that insurance fraud costs Canadians billions of dollars each year. In recent years, insurance fraud has become more prevalent, especially with respect to automobile insurance schemes. The province of Ontario has the highest instance of insurance fraud, likely as a result of having the richest automobile insurance benefits. Unfortunately, due to these inflated insurance claims, false injury and damage claims, and large insurance crime rings, the increase in cost is passed on from the Insurance Companies to the insured and everyone across Canada is paying for it.
There are several steps Insurance Companies take in order to help identify insurance fraud and avoid paying out fraudulent claims:
– Doing background checks and security clearances on the Insurance Adjusters that they hire
– Analyzing an insured’s claims history and frequency, looking for any patterns that may exist
– Identifying any suspicious loss indicators, such as a large increase in coverage right before submitting a claim
– Hiring private investigators or utilizing a special investigation unit
– Implementing complex computer systems which can detect suspicious billing patterns from repair shops or medical providers
– Utilizing social media
– Requesting assistance from the general public
A new initiative, called CANATICS (Canadian National Insurance Crime Services) has also recently been created, which allows Insurance Companies to data pool and more efficiently identity fraud.
As a consumer, there are several steps that you can take to help reduce the impact of insurance fraud:
– Report any known instances of insurance fraud
– When involved in a collision, take pictures if possible, noting the positions of the vehicles and any damage that may not have occurred from the accident. Also be aware of the behavior of other drivers and passengers, watching for signs of possible injury.
– Contact the police if there is any suspicious behavior
– Always use a trustworthy repair shop when having your vehicle repaired (most Insurance Companies can provide you with a comprehensive list of approved and trustworthy shops)
For more information on insurance fraud and steps you can take to protect yourself, please visit the Insurance Bureau of Canada.
Thank you,
The Costen & Associates Team
Insurance Fraud
