Insurance Fraud costs Canadians an estimated $3 billion annually – or approximately 10 to 15% of your insurance bill.

Insurance crime is on the rise.  In June of 2009, a seemingly harmless two car collision slowed traffic for hours on one of Toronto’s busiest highways, Highway 400.  When officers arrived, they quickly realized it was no accident, but a staged incident – one that involved 11 people, including two tow truck drivers who were already on the scene.

More recently, the Toronto Star reported on a $1.3 billion insurance fraud spanning hundreds ofOntarioclinics, involving falsified medical insurance claims.  All appear to stem from bogus rehabilitation clinics, where victims are often referred after an accident.  At the clinics, victims are given forms to sign that allow the clinics to submit claims to their insurance company on their behalf.  From there, false or exaggerated claims are submitted, such as thousands of dollars in medical treatments that were never received by accident victims.

Many people may not realize the cost of insurance crime.  In actuality, insurance fraud affects us all – to the tune of 10 to 15% of insurance premiums for home, auto, and business are allocated to cover the cost of false or exaggerated claims.

Insurance companies and police have become more aware of these scams, but the cost continues to balloon out of control.  The Ontario government has recently set up a task force to look into the growing problem of insurance fraud, which will introduce new rules to ensure that invoices submitted for treatments are indeed valid.  This group will also place more responsibility in the hands of insurance companies to investigate claims fully.  In September of 2010, the government introduced auto reform, which reduced minimum amounts of basic medical and rehabilitation benefits (among other items), which is expected to help reduce the overall effect of insurance fraud.

What can you do to help reduce insurance fraud?

• While driving, do not tailgate, and look beyond the car in front of you while driving.  Be alert behind the wheel.

In the event of an accident:

• Call the police to the scene.
• Be sure to get the other driver’s licence plate number, and do a quick analysis of the damage.  Make note of how many passengers there were in the car, and a description of each, including their injuries (make note, for example, if the passengers seem at ease, but more injured when the police arrive).
• Take pictures of the other car, if you can, with your cell phone (or a digital camera if you have one available).
• If a tow truck is called, make sure it’s reputable.  See if it has some type of licensing number on its side and ask the driver if he/she has a police contract.  Carefully read everything you are asked to sign, and listen for clues such as whether the driver recommends a repair shop without being asked.

After an accident:

• Contact your insurance company or broker.
• See only medical and legal professionals you know and trust, or that are recommended by people you know.
• Know what your medical benefits are.  Learn what’s covered and what isn’t (your insurance broker will help with this information, and it is also included on your policy).
• Keep detailed records of your medical treatments, including dates, locations, services received, and the names of the persons who provided the treatments.
• Never sign blank insurance claim forms.
• Never give strangers your policy number, insurance ID number or any other information, particularly if they offer an incentive, such as a free gift or treatment.

If you suspect an insurance crime, please call the Insurance Bureau of Canada’s tip line at 1-877-IBC-TIPS(422-8477).