Insurance fraud may seem like the type of crime that only hurts the insurance companies; they’re the ones who have to shell out for all those fraudulent claims after all, right? Actually, insurance fraud, including fake or inflated claims, hurts honest policy holders, who end up paying higher premiums to cover the costs that the cheaters rack up.
The Cost of Insurance Crime
In Ontario alone, it’s estimated that consumers are forced to shoulder the costs of up to $1.6 billion in fraudulent automobile insurance claims, according to the Ontario Auto Insurance Anti-Fraud Task Force Final Report. In fact, a lot of insurance fraud is conducted by gangs or other organized groups, but even your average policy holder can hurt the system by padding their claims with fake information, the Insurance Bureau of Canada (IBC) said in a statement.
“When someone makes a false or exaggerated claim, honest policyholders pay for it,” explained IBC's Vice-President of Investigations, Rick Dubin. “Insurance criminals take money right out of your pocket. When they cheat, you pay.”
It’s a view shared by Ontario Premier Kathleen Wynne, who last month told the press that she is “specifically interested” in reducing insurance fraud in order to save the industry money, which could then be passed along to the consumer, reports CTV. IBC has asked the government to implement task force suggestions, which include things like a licensing system for the towing industry.
There is good news for honest policyholders. You can help be part of the solution, just by reporting suspicious behavior. IBC’s Anti Fraud Task Force allows you to submit an anonymous tip by calling 1-877-IBC-TIPS, or through the online form available on their website.
What Sort of Information Should be Reported
Well, helpful tips can include everything from suspicions of padded insurance claims to staged car accidents. It all costs you, the policyholder, when someone puts in a claim for money they don’t deserve. According to Dubin, IBC investigates all tips seriously, no matter how big or small. If something seems suspicious or “not quite right,” he urges honest policy holders to report it.
However you slice it, insurance fraud puts money in the pockets of criminals who don’t deserve it, at the expense of law-abiding citizens. When someone else cheats or games the system, that cost is reflected in your insurance premiums. But you aren’t powerless: by reporting the crime, you can help cut down on fraud, which is not just the right thing to do, but can end up saving you money in the long run.
Insurance Brokers Help Determine Valid Claims
First Foundation’s insurance brokers are very experienced in claims submissions and know what constitutes fraud to an insurance company and what doesn’t. In many cases, a policy holder may not actually know the difference between a fraudulent claim and a legitimate one. Your broker not only holds your hand through the claims process, they are invaluable in determining whether or not you should actually file a claim in the first place.
At First Foundation, we’re committed to you, the policy holder. We are committed to fighting fraud because it costs everyone money and drives rates up in the industry.