Insurance fraud becoming mainstream issue

GTA is the staged accident capital of Canada, says IBC.

An ongoing concern in the insurance industry is fraud, especially that of staged auto accidents. Now the issue is starting to gain more mainstream attention, as evidenced by a recent front page story in the Toronto Star about several cases where Greater Toronto Area (GTA) medical clinics are under investigation after filing fraudulent claims in the thousands.

“All Ontario auto policyholders end up being victims since we all pay for insurance fraud in the form of higher premiums,” said Rick Dubin, vice president investigations at the Insurance Bureau of Canada (IBC). “Staged auto collisions start the fraud chain in many cases, which places innocent drivers in dangerous situations.”

In an interview with Canadian Insurance Top Broker on July 14, Dubin said that the GTA is the “staged accident capital of Canada” and that many fraudsters are taking tips from cases in the US, especially central Florida, where staged accidents have been a growing concern for years.

“The government needs to develop further reforms, particularly a regulation strictly controlling the ownership and operation of medical clinics through the GTA,” he said.

Dubin suggested brokers should advise clients to take note of how a collision has taken place, because “if things don’t seem right, they probably aren’t.”

Additionally, be wary of tow truck drivers that show up immediately at the scene of an accident and direct insureds to body shops or medical clinics. The tow truck drivers might get $1,000 for every person they refer, according to Dubin.

Also, advise insureds not to sign any blank forms and documents at medical clinics, warns Dubin.

For additional advice on detecting staged accidents, click here.

For more tips on how to combat fraud, click here.

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