Many Ontario Drivers Don’t Recognize Insurance Fraud’s Effects on Premiums

March 2, 2017

A recent survey of Ontario, Canada drivers raises concerns about their ability to recognize, and therefore reject and report, auto insurance fraud.

The survey conducted by Ipsos for the Financial Services Commission of Ontario (FSCO) asked a series of questions to gauge drivers’ knowledge and attitudes toward auto insurance fraud.

When put to the test, 27 percent of drivers were unable to identify acts of fraud. Baby boomers, aged 55 and over, were most knowledgeable, while millennials, aged 18-34, were least likely to identify acts of fraud.

FSCO estimated that auto insurance fraud represents from 9 to 18 percent of claims costs, which represents between $116 (US$87) and $236 (US$177) per average premium paid in Ontario, according to statistics compiled by KPMG in 2010.

Other survey findings include:

  • Eleven percent of respondents admitted they were aware of a family member who has made an exaggerated or false claim
  • The most popular type of admitted fraud was convincing an auto body repair shop to add in unrelated fixes and put the full cost through insurance (5 percent)
  • Only 35 percent knew how to report auto insurance fraud
  • Thirty-five percent did not know that defrauding an insurance company is an offense under the federal Criminal Code
  • Twenty-five percent did not know that auto insurance fraud affects auto insurance premiums.

While nearly one in 10 respondents said they had submitted an exaggerated or false claim, nearly two in 10 admitted they know a friend who has done the same.

Men and millennials were significantly more likely to admit they committed auto insurance fraud than other groups. Five percent of men admitted to claiming false injury from an auto accident compared to only one percent of women. Similarly, nine percent of millennials admitted to this compared to one percent of baby boomers.

The survey was conducted as part of FSCO’s Fraud Prevention Month campaign, which aims to increase awareness of potential fraudsters and victims regarding how to recognize, reject and report auto insurance fraud.

“Auto insurance fraud is illegal and factors into the cost of premiums. We encourage Ontarians to reject the many types of auto insurance fraud and know how to report suspicious behavior to their local police and their insurance company,” said Tom Golfetto, executive director, Auto Insurance Division, FSCO.

FSCO recommends that drivers:

  • Read their insurance policy carefully – understand their coverage, rights and responsibilities
  • Never sign blank insurance claims forms
  • Fill out their auto insurance application or claim forms accurately and make sure they haven’t made any mistakes
  • Keep records: get the names, addresses, phone numbers, license plate and driver’s license numbers, and insurance information from all those involved in an accident. If it’s safe, take photos of the accident scene
  • Do not sign any documents or agree to any terms at the site of an accident
  • Report all accidents and losses to your insurance company
  • Call local police if they suspect auto insurance fraud
  • Review benefit payment information from their insurance company to confirm that treatments, medical providers and dates are accurately listed.

Source: Financial Services Commission of Ontario (FSCO)

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