One of the biggest factors that drive car insurance rates up in Ontario is insurance fraud. Insurance companies pay out over two Billion dollars every year due to false fraudulent insurance claims. When a person falsifies information to an insurer to benefit financially, this is referred to as insurance fraud. There are many people out there that are on the prowl for unsuspecting victims. This is why it is especially important to be cautious when purchasing car insurance. Should you unknowingly purchase fraudulent car insurance and then you were involved in a collision, it would be the same as not having any car insurance at all. You would be on the hook for all costs that would otherwise be covered by your insurance company. However, fraudsters not only target individuals, but they also make many types of fraudulent claims to insurance companies.
Types of Car Insurance Frauds in Ontario
There are several ways criminals try to fraudulently make insurance claims. Some examples are:
- Staging or intentionally causing a collision
- Exaggerating insurance claims or falsifying claims
- Making claims that didn’t happen
- Dumping vehicles
- Faking injuries or damage to a vehicle
- Staging a car theft
- Lying about the value of the vehicle
- Opportunistic insurance fraud
Car Insurance Frauds Punishment in Canada
Charges for insurance fraud in Canada include fraud under $5,000 up to 2 years in jail maximum, fraud over $5,000 up to 14 years in jail maximum and fraud over $1 million carries a minimum of 2 years in jail according to the Criminal Code of Canada.
Auto Insurance Fraud Red Flags
There are several red flags that indicate an insurance fraud. Some of these red flags include:
- A broker charging you a fee for obtaining insurance
- An insurance company never accepts e-transfers or wired money payments
- A broker asks you to sign a blank document
Car Insurance Fraud Investigation Process
Most insurance providers hire their own insurance investigators to detect, investigate and manage insurance fraud. Part of an investigators process into investigating insurance fraud includes:
- Obtaining all information from all parties involved
- Review all available photos
- Visit the scene where the incident occurred to look for evidence pertaining to the collision
- Inspect the vehicles involved
- Reconstruction of the collision
- Obtain statements from any other passengers in the vehicles or witnesses
- Review the police report
What To Do If You Suspect You May Be A Victim of Insurance Fraud
One of the most important things you can do if you suspect you may be a victim of car insurance fraud is to document everything. This may be used as evidence in convicting the perpetrator. Information you should document include:
- Claim Forms
- Estimates and invoices
- Financial transactions and bank records
- Work orders
- Medical reports
- All emails, phone calls, voicemails, documents received in the mail and text messages
Always remember to exercise personal safety first. Never confront someone if you are uncomfortable, intimidated or unsafe. Contact the police right away.
Tips on Recording Vehicle Damage Fraud
To help to avoid becoming a victim of insurance fraud there are several things you can do to record the damage to your vehicle. You can:
- Take regular pictures of your vehicle to compare with after it has been damaged.
- Take photos of all angles of the vehicle before and after it has been repaired, using a measuring tape or measuring stick on the area where the damage has occurred.
- If you notice damage on the other vehicle that seems to be unrelated to the collision take a picture or make a note of it.
- Take notes and/or photos of airbag deployment.
- Look for any possible witnesses or evidence pertaining to the collision as well as business security cameras or witness dashboard cameras.
Reporting An Insurance Fraud
To Report an insurance fraud or suspected insurance fraud that you have witnessed or are a victim of you should report it as soon as you can. There are several ways you can report insurance fraud such as:
- Contact your insurer
- File a report with the local police department
- Call Crime Stoppers
- Contact an Insurance Bureau of Canada Consumer Information Officer
- Submit an anonymous online tip form
- Make an anonymous phone call to 1-877-IBC-TIPS (1-877-422-8477) available 24/7
- Contact the Canadian Anti-Fraud Centre
- Consult with legal counsel if necessary
Things You Should Do If You Think You May Be A Victim of Injury-Related Fraud
If you suspect you may be a victim of injury-related car insurance fraud there are some things you should keep track of. Important things to track are:
- Record all medical appointments including physiotherapy if applicable. Include the dates, times, length of appointment or treatment, and details of appointment or treatment.
- Details about notifying your insurance provider.
- Research pertaining to anything found online pertaining to fraudulent clinics, medical staff and doctors that you may be dealing with.
- Record and Anonymously notify the injury-related fraud to the Financial Services Regulatory Authority of Ontario
Opportunistic Insurance Fraud
Opportunistic insurance fraud occurs when someone files a legitimate insurance claim but falsely takes advantage of it for personal or financial gain. A person may fraudulently make false claims pertaining to pre-existing injuries or damages to their vehicles that were pre-existing prior to the accident. A person may also be guilty of exaggerating personal injuries or vehicle damage.
Accidental Insurance Fraud
There are some people that unintentionally commit insurance fraud. They may provide false or inaccurate information to their insurance provider unintentionally. The best way to avoid unintentional insurance fraud is to be completely open and honest with your insurance provider. Always notify your insurance provider of any changes in your circumstances that could affect your car insurance.
Insurance Fraud Directly Impacts Everyone
As a direct result of high-level insurance fraud in Ontario, Ontario drivers pay higher premiums to compensate for insurance company losses. Ontario drivers end up paying approximately $240 extra every year to compensate for insurance company losses due to insurance fraud. The justice system is directly affected as well when having to process and prosecute individuals who commit insurance fraud.