6 ways to fight fraud

15 cents of every dollar policyholders pay goes towards fraudulent claims.

Fraudulent claims cost Canadian policyholders and insurance companies several billion dollars per year, according to the Insurance Bureau of Canada (IBC). Further, IBC estimates that at least 15 cents of every dollar policyholders pay for their insurance policies goes towards paying out false claims.

“There is no face to insurance fraud or any sort of person who is more likely to commit it,” said Saskia Matheson of Allstate Canada. “Too often people commit an insurance crime because it seems victimless, but it is Canadian drivers, tenants and homeowners who end up paying the price for other people’s dishonesty.”

March is fraud prevention month, and the company is cracking down on insurance fraud and educating Canadians on how to protect themselves against this type of crime.

Allstate Canada classifies insurance fraud as “hard” or “soft.” Hard fraud is a deliberate attempt either to stage or invent an accident, injury, theft, fire or other type of loss that would be covered under an insurance policy. Soft fraud is the most common type of insurance fraud and happens when someone exaggerates a legitimate claim.

“We recently had a case where a customer reported a home invasion and provided an extensive list of contents from their home that were stolen,” said Matheson, citing an example of soft fraud. “Our claims team compared the list of items to crime scene photos taken by police, and they discovered that several of the large ticket items that had been reported stolen were actually still in the house after the robbery. In the end, the insured was taken to court for fraud.”

The most common types of insurance fraud are staged auto theft, arson, fake damages and inflated claims. While most insurance claims are legitimate, the Canadian Coalition Against Insurance Fraud estimates that 10% to 20% of claims may be false or contain some questionable element.

Canadians are reminded to provide complete and honest information to their insurance providers about their claims to avoid any delays or problems.

Here are 6 tips to help Canadians protect themselves against insurance fraud and to help keep costs down for everyone.

1) If you’re involved in an automobile collision, be sure to obtain the proper information from the other party. Take down the licence plate numbers and get a copy of the police report.

2) When using tow trucks, use your insurance company’s network of trusted vendors and read carefully everything the tow truck driver asks you to sign.

3) Keep detailed records of your medical treatments. Make sure treatments are necessary and include all dates, locations and who provided the treatments and what diagnoses and services you received.

4) Read all forms before signing and never sign a blank insurance form.

5) Never take referrals offered by a stranger.

6) If you suspect insurance fraud, report it immediately to the police. To submit a confidential tip to the IBC regarding insurance crime, call 1-877-IBC-TIPS. 

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