March is Fraud Prevention Month in Canada. According to the Canadian Coalition Against Insurance Fraud (CCAIF), general insurance fraud costs Canadian insurers $1.3 billion every year.
What does that mean to you? It’s estimated that 10 - 15% of your home, auto or business insurance premiums are due to fraudulent insurance claims.
Types of insurance fraud:
- Staged accidents - This is a particular problem in larger cities, where a collision is staged to look like the victim’s fault. Often the damage is exaggerated and the person who stages the accident works in conjunction with fraudulent auto body shops.
- Exaggerated claims - People who take advantage of a recent break-in and embellish upon the items stolen. We’ve all heard stories of people getting new golf clubs and leather jackets when their car was broken into!
- Incorrect information - This fraud occurs when people purposely provide insurance companies with false information for the benefit of paying lower insurance premiums. Example: using a country cottage address for auto insurance purposes rather than their actual full-time city address.
- Medical and rehab clinic fraud - Clinics may offer patients unnecessary treatments or request patients to sign blank forms for accident benefits.
- The sale of stolen cars - Criminals will manipulate the Vehicle Identification Number (VIN) to hide the fact that it was stolen and then sell it cheaply to an unsuspecting consumer.
Don’t be a victim of insurance fraud:
- Always report car accidents to your insurer and the police.
- Never sign blank forms at a medical or rehabilitation clinic.
- Always deal with respectable collision and auto body companies.
- Purchase vehicles from a reputable dealership.
- Be wary of people posing as insurance brokers, offering incredibly low premiums - with payments requested via an email transfer.
If you feel that you are being encouraged to manipulate or exaggerate your insurance claim by your insurance broker, report them immediately to the Insurance Bureau of Canada (IBC). The government and insurance companies are stepping up the fight against insurance fraud and you can help. The IBC runs a toll-free tip line, 24/7 - 1-877-222-TIPS, or confidentially
online here.
In the end, insurance fraud costs us all, do your part to prevent it.