Cracking Down Hard on Auto Insurance Fraud
Not many of us know when an auto insurance scam is going down - especially if we are in the middle of a distressing ‘fender bender’ where it’s happening (that could be a staged collision), or when our premiums go up for no apparent reason. What we do know is that we all pay for insurance fraud, and it isn’t fair.
Auto insurance fraud is big business in Ontario - to the tune of many millions of dollars each year; some of the ways this is done - by criminal rings, ordinary folk, healthcare providers - include:
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Lie on an insurance application (knowingly)
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Claim for fake injuries after a collision
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Rehab professionals submit claims for more treatments after an accident victim has already recovered
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Claim earlier damage to a car along with damage from a new collision
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Make an injury claim for an auto accident that never happened
Fortunately, the Ontario government’s 2011 budget cracks down on auto insurance fraud. The new initiatives, being policed by the Financial Services Commission of Ontario (FSCO), include:
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Working with insurance companies to use the brand-new Health Claims for Auto Insurance (HCAI) database to detect potential fraud
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New rules to ensure that auto-related medical treatments are provided as invoiced
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An Anti-Fraud Task force to determine the scope of auto insurance fraud in Ontario
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Making recommendations on consumer education, detection, investigation and enforcement
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Requiring insurance companies to show each year that they have controls that satisfy the new rules
Ralph Palumbo, the Insurance Bureau of Canada’s VP of Ontario, sums it up: “The vast majority of Ontarians are honest, truthful and determined to return to normal activities after a vehicle collision. They should not have to pay more for those who are not.”
It reminds us of that series of TV ads a couple of years back where movie producers tried to show that making and watching pirated films is no different than stealing a car or shoplifting...”
The government’s move, reminds insurance companies they not only have the right to ferret out fraudsters, they have the responsibility to do so. What do you think? Leave your comments here.