Canadian auto insurance brokers may soon have some angry consumers on their hands.
Last week, drivers in the UK learned that their average auto insurance premiums were slated to increase by 15%, due to a recent uptick in fraudulent whiplash claims. This amounts to an additional £80 (CAD$163) per year, according to
The Telegraph.
In addition, Esure, one of Britains largest auto insurance providers, reported that the unexpected spike in these claims caused their profits to fall by 20%. The Canadian market seems to be well on its way to a similarly detrimental situation.
“From a big picture standpoint, this is happening in Canada, particularly Ontario, which is the staged-collision capital of the country,” said Rick Dubin, vice president, investigative services,
Insurance Bureau of Canada.
The issue is more pervasive than it seems, however. Dubin’s team frequently encounters complex auto insurance scams involving organized crime circles that not only conduct staged collisions, but continue to defraud medical services, providing treatment afterwards.
“Not only will they claim soft tissue injuries when they’re not really impaired, but they will claim accident benefits and related treatments such as physiotherapy, chiropractic and weekly income disability or charge rehab facilities for services that aren’t being rendered,” he said.
Many fraudsters either forge the signatures of medical practitioners or use their college registration numbers to convince insurance adjustors that their claims are legitimate.
By one estimate that Dubin finds “conservative,” auto insurance fraud costs the industry $1.6 billion in the province of Ontario alone. Concern over that figure is only intensified by the discovery American crime rings have begun to establish illicit operations in Canada.
Some even build sham medical facilities that appear to be rehabilitative but are actually designed to expedite fraudulent personal injury claims.
“We’ve seen a number of them in the GTA that FSCO has either fined or shut down, and we have reason to believe that some of the players from a major fraud case in New York State have come to Ontario and are operating in the province,” he said. He argues that part of the reason auto premiums in the province haven’t fallen by 15% despite the Liberals’ pledge is “the result of the significant amount of fraud taking place, a lot of which is certainly organized crime and there’s still a lot more work to do.”
He wants brokers to be on the lookout.
“In staged collision scams, they should be looking for red flags that would raise concern,” Dubin said. “If anything suggests that a claim might be fraudulent, report it to 1-877-IBC-TIPS, Crime Stoppers or the police.”
