Insurance Fraud in Ontario
Insurance fraud is a big problem in Ontario. In particular, car insurance fraud. It's one of the leading causes of high vehicle premium rates. It is estimated that $236 of each premium goes towards the cost of fraud in Ontario. Statistics Canada estimates there are approximately 9.7 million vehicles in Ontario. That's approximately $2.3 billion per year to cover the cost of Auto Insurance fraud.
"So there's different types of fraud, there's premeditated fraud, there's also opportunistic fraud. So that whole fraud bucket ends up costing drivers in Ontario $1.6 billion, which translates to each and every one who has an insurance policy on average, about $236 a year, that's going to fraudsters. Over the past five years, claims have gone up 21 per cent, and the payout on claims has risen 22.1 per cent." March 2, 2018, interview, Pete Karageorgos (of IBC). (3)
Four common types of insurance fraud
- Inflated Towing Costs, Storage and Vehicle Repair
Dishonest towing companies, storage facilities, and auto repair shops intentionally over bill Insurers, driving up insurance premium costs. Towing costs are padded, daily storage costs are between $70 and $100+ per day, and in some cases repair shops will create new damage to vehicles which did not occur as a result of the accident.
- The Blank Form
Disreputable medical clinic staff ask claimants to sign blank accident benefit forms and then charge Insurers for services that were not provided. Or, the clinics might forge the signatures of medical practitioners on forms to bill Insurers for services never rendered.
- Exaggerated Personal Injury Fraud
Unscrupulous Personal Injury Lawyers exaggerate the extent of legitimate injuries, use a previous injury as the basis of a new injury, file false insurance claim information, and file frivolous lawsuits. Common injuries that are faked are whiplash, shoulder injuries, and spinal injuries.
- Staged Collision
In a staged collision, a driver intentionally causes an accident with an unsuspecting driver and makes it look as if the innocent driver is at fault.
How Prevalent is Auto Insurance Fraud in Ontario
FSCO(1) estimates that:
- 10% of people from Ontario ask body repair shops to add additional repairs to a car damaged in an accident
- 11% of people from Ontario believe it's okay to sign a blank insurance form for medical practitioners
- 9% of people from Ontario believe adding extra medical treatments is also okay
- 10% of people from Ontario inflate the value of contents stolen from their vehicle
7 Ways SIS Can Help You Reduce Auto Insurance Fraud
- During regular working hours, SIS will suggest to the Insured that the vehicle be taken to one of the insurance company's preferred body shops. If the vehicle is thought to be a total loss or it is outside of regular working hours, SIS will suggest towing the vehicle to one of our secured impounds.
- SIS will dispatch an Insurance Company approved tow operators to pick up the vehicle. If the insurance company does not have a preferred towing company or they don't have a tow truck available, SIS will dispatch one of our approved towing operators to pick up the vehicle.
- By controlling the accident scene, especially the destination of the towed vehicle, SIS prevents fraud by limiting exposure of the insured and their vehicle to unscrupulous tow operators, repair facilities and storage compounds. By limiting contact with this group, there is less chance that the insured can be given recommendations for fraudulent health care practitioners and personal injury lawyers.
- The average cost per day for vehicle storage has risen dramatically over the last few years. It's common to be charged $70 to $100+ per day. Plus, they make it very difficult to access the vehicle, extending the number of days it is stored.
- SIS reduces the number of days the vehicle will be held in storage. If it is determined to be repairable, the insurance company can have it towed at the Insurer's discretion. If the vehicle is a total loss, we auction it directly from our impound with no need for an additional tow. Indirectly, fewer days in storage results in a reduced number of days the Insurer will be charged for the rental car.
- SIS provides easy access to the accident vehicles by the insurance appraiser/adjuster and their client. The Insurer can simply log into our website and make an appointment for themselves or their client to view the vehicle.
- SIS tracks the time the vehicle leaves the accident scene until it arrives at one of our impounds. When it arrives, pictures are taken of the exterior, interior and engine compartment. By tracking the travel time and taking pictures, this will reduce the chance of parts being stolen from the vehicle while on route.
Insurance companies need to be tough on fraud in order to deter future schemes and attacks. Secured Impound Solutions has efficient and effective processes in place, supported by today's available technology to accomplish this. The benefits of having a system in place that can, in milliseconds, manage the removal of the insured vehicle from the accident scene can fast track the claim process.
Customers will get their vehicle back quicker, with less hassle, and fraudsters will be deterred due to our company's strong capability to prevent fraud that happens as a direct or indirect result of a motor vehicle accident.
Contact Secured Impound Solutions to schedule an in house or remote presentation to explain this in more detail.
- Fighting Auto Insurance Fraud: What You Can Do
- Insurance Fraud: What You Need To Know About Auto Insurance Fraud In Ontario
- Pete Karageorgos from IBC talks about how to report auto insurance fraud (Mar 2, 2018)