By Sheryl Smolkin
Read this article and comments at Moneyville.ca
In early April, the Canadian Online Insurance Marketplace Kanetix reported that car insurance rates in Ontario increased by 6.7 per cent over the last year. The multi-million dollar business of auto insurance fraud is a key factor driving up premiums in this province.
A recent Ontario investigation called Project 92 teamed insurance company investigators with law enforcement officers and two dedicated crown prosecutors. More than 50 staged collisions were investigated, with 300 charges laid, 22 individuals convicted and two people jailed.
Rick Dubin, the Insurance Bureau of Canada’s VP of Investigative Services says the losses uncovered by this one project will be up to $25 million. In addition, there are currently up to 50 other organized crime rings under investigation by the Insurance Bureau of Canada for staged collisions and associated service provider fraud.
Although insurance fraud comes in many forms, Dubin cites three common examples, how you can recognize them and what you can do to protect yourself.
The GTA is the “staged collision” capital of Canada. In one recent case, a driver was fully stopped waiting to turn left into a plaza. The oncoming car was also stopped and waived to her to proceed. Finally she started her turn and the oncoming vehicle drove right into her causing considerable damage to her vehicle.
A red flag that this was a staged collision was that the driver and three occupants showed no sign of injury. However, as soon as emergency services showed up they started complaining and demanded to be taken to hospital by ambulance.
In these kinds of cases Dubin says “victims” hoping to get a hefty settlement as a result of the staged accident pay up to $1,000 for a seat in the car that causes the accident and paid witnesses are often recruited to say it the other driver was at fault. The insurer investigated the strange facts and decided not to hold the driver responsible.
What should you do if you suspect you have been involved in a staged collision?
• If you have a cell phone with a camera, take lots of pictures right away of the other vehicle, where it struck your vehicle, the occupants while still in the vehicle and the interior of the car.
• Check if the air bag deployed.
• Get full particulars of the other vehicle, the occupants, the driver and any witnesses.
• Report suspicious claims to your insurer and the Insurance Bureau of Canada.
Fraudulent rehab claims
The purpose of the staged collision may be not only to stage the claim for the physical damage to the vehicle, which in some cases may be a salvage vehicle with little value. Often the goal is to get these people into rehab clinics where further fraud can be committed.
In Ontario, it is not required that a clinic owner or operator be a registered medical professional. One of the things the Insurance Bureau of Canada has been advocating is stronger control over licensing and operation of medical clinics.
“Medical professionals are not committing fraud,” Dubin explains. He says one scam fraudsters use is to enter registration numbers and forged signatures of physiotherapists or doctors formerly working at the clinic on accident claims form.
How can you help to prevent fraudulent rehab claims?
• Never sign treatment forms in blank.
• Keep in touch with your insurer and let them know how you are doing and how many treatments you needed.
• If your insurance company sends you a summary of treatments and it says you went for 20 appointments but you only had two, report the discrepancy.
Buying a used car:
Be extremely cautious if you buy a used car privately, particularly if the deal seems too good to be true. The car may be stolen and the original vehicle identification number altered so it can’t be traced. The car may also have been written off as a total loss, subject to a lien or have suffered flood damage.
How can you ensure you are getting the real deal?
• For a fee, companies like CARFAX and CarProof can do a history search on the vehicle identification number (VIN).
• You will get a vehicle history of the ID number, discover any liens, find out if the car was involved in past accidents and if it has been marked as a salvage, re-built or non-repairable vehicle.
• Run the VIN at the Canadian Police Information Centre website under the stolen vehicle section.
• Have the vehicle inspected by a very experienced mechanic.
• Ask the seller for his ID and proof of title for the car. If they do not match, walk away.
The province of Ontario has announced a series of initiatives to fight fraud, abuse and over utilization that drives up costs for law-abiding policy holders. But it’s still caveat emptor – we all have to do our part.