A car comes out of winter storage, but the owner forgets to restore full coverage before driving. A homeowner rents out a room on a short-term basis, never adds it to the policy, and then suffers a loss. On paper, those are clear-cut coverage issues. In real life, they sit in a murky space between honest oversight and something that looks a lot like fraud.
It’s the “grey zone” that worries investigators like Niro Kandasamy (pictured), AVP of fraud and special investigations at TD Insurance, far more than the Hollywood version of insurance crime.
“What we want to do is really distill down what’s transpired in that situation,” Kandasamy says. “From a claimant’s perspective or insured’s perspective, what was their motive behind it? If something was unintentional, or let’s say some of the softer type of fraud.”
TD’s recent survey highlighted that Canadians struggle to recognize everyday fraud scenarios, even as they overwhelmingly agree that fraud is a serious issue that drives premiums higher. Kandasamy’s job sits at the point where those blind spots crash into claims – and where insurers have to decide whether a client made an honest mistake or has crossed the line.
When a claim is flagged as suspicious, either by frontline adjusters or automated tools, it’s Kandasamy’s unit that takes a closer look. The process, he insists, is less about “gotcha” and more about reconstruction.
“It’s through a variety of questions that we ask,” he explains. “The intention is to really understand what transpired. We always give them multiple opportunities as we ask them various questions to really understand what’s transpired, what led them to this situation they’re in.”
That can mean going well beyond the incident itself and revisiting the history of the policy. Investigators look at what coverages are in place, which changes were made or never made, and whether those patterns line up with the story being told.
Only then, once the historical and documentary picture is clear, does the team move further into what Kandasamy calls “further review”: obtaining receipts, documents or other evidence if needed.
Sometimes, the pattern is familiar enough that investigators are highly confident they’re looking at an honest mistake. Temporary coverages that are never removed, or seasonal changes never reversed, are classic examples.
“You’ll see different types of coverages where individuals will put those types of coverages on for a temporary period and then just honestly kind of forget that it’s expired,” he says. “Same thing with the vehicle. If you don’t drive it in the winter, for example, you change your coverage, completely forget to add it back onto your coverage, and you’re driving on the road and something happens.”
These are the kinds of cases where, when investigators look at the policy, “we can then notice some of those things and look at it and say it’s likely something that somebody had some oversight on.”
For most consumers, the idea of a claim being sent to a special investigations unit is unnerving. The fear is simple: once you’re under suspicion, the insurer assumes the worst.
Kandasamy says he spends a lot of time trying to prevent that mindset from taking hold in his own team.
“What I do with my team in particular is really just put ourselves on the other side,” he says.
He acknowledges the risk that comes with expertise. “Obviously, being a bit of an expert on one side moves you to that point where you could then have some unintended biases,” he says. Investigators see patterns of misrepresentation every day. It’s easy for them to start viewing every inconsistency as deliberate.
To counter that, Kandasamy pushes a “normal person” test. Would a regular consumer, who doesn’t live and breathe insurance, plausibly behave this way? Would they understand the implications of failing to add a tenant or of leaving winter coverage in place?
“If a normal person would perceive something this way, or would a normal person behave in this manner?” he asks. “It’s really putting ourselves in that perspective and then building your line of questioning from that.”
Breaking out of insurance-speak is part of the same discipline. Kandasamy encourages his team to imagine explaining coverage to a grandparent or a five-year-old. If they can’t do it without acronyms and jargon, they haven’t done the work.
“When we’re talking to customers, [we want] to really distill it down to make it very easy for them to understand what we’re asking of them,” he says. “So their interpretation doesn’t get confused from a context perspective.”
Even with empathy and plain language, not everything can be chalked up to oversight. At some point, intention shifts.
“The survey kind of showcased that individuals are able to see that there is small fraud happening,” Kandasamy says. “A small percentage kind of acknowledged that they put their hands up when it does.”
He sees two broad categories: the unintentional, and the “softer” deliberate fraud that creeps in when people feel they are “owed” a bit extra. In insurance, he notes, premiums are a shared cost. When small exaggerations accumulate, everyone pays.
“As you see more types of fraud, even small fraud, as premiums are affected over time, you kind of get the sense that, ‘Hey, I’ve been paying for a number of years. I almost have a bit of a right,’” he says. “And I think that’s where it becomes a bit more challenging, where the intention starts to change.”
At that point, policyholders may decide to pad a repair estimate, add an item that wasn’t actually damaged, or conveniently forget to disclose something material. It’s still not staged collisions and crime rings – but it’s no longer just an honest mistake.
“Most people, when they think about insurance fraud, [think about] the more deliberate acts like staged collisions,” Kandasamy says. “Less so on these smaller items.”
From an investigator’s chair, it might be tempting to see the answer to soft fraud as more surveillance and tougher denials. Kandasamy keeps coming back to a different lever: awareness.
“I think that’s where really education comes into play,” he says. “To say, here’s how it affects not only yourself, but the entire insurance industry.”
That was the real purpose behind TD’s survey, he argues: to understand the disconnect between how insurers and the public perceive everyday fraud, and to identify where better communication could prevent problems before they reach his desk.
“It gives us the opportunity to move from being reactive, but really getting out there, building the trust with the communities, and really sharing how we can better protect them and how we can protect each other,” he says. “Because it is a shared service, hopefully that starts to drive the right actions. And we all benefit from costs stabilizing across the system over time.”
