How Much is Auto Insurance Fraud Costing You?

March is Fraud Prevention Month and Insurance Bureau of Canada (IBC) is highlighting that everyone can play a role in limiting the personal and financial costs of auto insurance fraud.

"Auto insurance fraud is a serious crime that costs Canadians billions of dollars each year," said Garry Robertson, National Director, Investigative Services, IBC. "It's an illegal, organized big business, largely unknown to consumers, that siphons resources away from our health care system, ties up our emergency services and courts, and drives up insurance costs."

The property and casualty (P&C) insurance industry is increasingly sophisticated in its ability to detect and prevent insurance fraud. This includes fraud perpetrated by organized crime rings that stage collisions and involves the collusion of service providers such as medical facilities, auto body shops, and tow truck operators. IBC and P&C insurers work closely with CANATICS, an organization that uses state-of-the-art analytics technology to help insurers identify possible fraudulent activity committed by these dangerous crime rings.

IBC and P&C insurers also work across Canada with law enforcement agencies, all levels of government, insurance broker organizations and other stakeholders to raise awareness and coordinate efforts to fight this crime.

"Insurers and their partners are already playing a significant role in reducing instances of auto insurance fraud. However, it is important that consumers know what to look for and to avoid becoming victims," added Robertson.

Consumers can help protect themselves against fraud by following these tips:

Do your homework when purchasing a used vehicle:

• Select a reputable dealer and look into the vehicle's history. If the deal seems too good to be true, it probably is.
• Inspect the vehicle you're considering buying to make sure it wasn't in a flood. Check for water stains and mildew. Also look for sand or silt under the carpets, floor mats and headliner cloth, and behind the dashboard. Look for rust on the screws on the console and in other areas where water doesn't normally reach.
• Check IBC's VIN Verify Service. This service helps you make sure the vehicle hasn't been fraudulently given a new vehicle identification number (VIN) to hide that it was previously branded as non-repairable.
• Have a certified mechanic inspect the vehicle before you buy it.

Avoid staged collisions:

• Never tailgate; instead, allow ample distance between your vehicle and the vehicle ahead of you. Look well beyond the front of your car while driving.
• If you suspect that you have been a victim of a staged collision, call the police from the accident scene and use IBC's tip reporting program. Notify your insurance representative immediately.

Take extra care if you are involved in a collision:

• Document all that you can. Write down the other vehicle's licence plate number, collect driver's licence and insurance information, photograph the damage, note the other driver's behaviour and watch for warning signs of a scam. Fill out the IBC collision report form.
• Use a reputable tow truck service. Be sure the tow truck has a licensing number. Carefully read anything you are asked to sign. Ask that your vehicle be towed to a secure location of your choosing.
• In the event of a collision, call your insurance representative as soon as possible.

If you think you have witnessed or been the victim of an insurance crime, call IBC's confidential TIPS Line (open 24 hours a day, seven days a week) at 1-877-IBC-TIPS, or submit an anonymous tip to IBC online.

IBC Initiatives to Identify and Deter Fraud

• IBC TIPS Line and online tip form: IBC provides a webpage and toll-free phone number to allow consumers to anonymously report insurance fraud.
• Provincial Auto Theft Network (PATNET): This award-winning IBC program brings together law enforcement agencies and the insurance industry to reduce auto theft and insurance fraud.
• VIN Verify Service: This free IBC service allows consumers to check a database containing information from participating IBC member insurance companies to determine whether a vehicle has been reported as being seriously damaged in a flood.

(Source: Insurance Bureau of Canada)