Purchasing an automobile insurance policy happens to be a logical move for most car owners. However, it’s imperative to take guard against insurance frauds. Walking in the customers’ shoes, you need to be wary about different fraudulent systems, which can eventually trap you.
Although the IBC has come up with strategic measures to curb insurance frauds in Canada, you may still run into malicious players. In this post, you will get a comprehensive idea of how you can effectively secure yourself from these menaces.
As a car owner, it makes sense to approach insurance specialists like Surex. With valuable advice from their experts, you can steer clear of uncomfortable situations.
How Does Insurance Fraud Work?
The issuer may deliberately indulge in insurance frauds, selling policies to car owners from non-existent insurers. Other instances of insurance fraud include non-submission of premiums, and generating policies to gain more commission. The term ‘insurance fraud’ refers to any attempt devised to exploit contracts of insurance to make financial gains.
The agents of sellers generally resort to three strategies while exploiting vehicle owners. These include:
Churning Fees:
In case any reinsurer or other types of intermediaries are involved in the purchasing process, each of them gets a commission from the premium. This, eventually, dilutes the actual premium. In the end, no money is left to settle the claims.
Diverting Premiums:
In this case, an individual or business may sell insurance even when they do not have a license. Later, they do not pay the claims when filed.
Asset Diversion:
Asset diversion involves the theft of assets of the insurer, like borrowing money for purchasing an insurance company, only to pay off the debt using the assets of the acquired company.
Opportunistic Fraud Scenarios
Insurance frauds may also take place where the insured person tried to exploit the insurer. Under opportunistic fraud scenarios, dishonest car owners often stage accidents.
Here are some of the opportunistic fraud scenarios that insurers need to be careful about.
- Damages to vehicles even before the collision, that the owner might include in the claim
- Extended recuperation time and malingering injuries
- Inflicting additional damage to the vehicle after a collision
- Exaggerating the injuries after a collision to benefit from the insurer
Premeditated Insurance Fraud
Premeditated insurance fraud also targets insurers in different ways. Here, the car owner stages situations for claiming insurance. One might have to resort to extreme actions in this case. Some of these include:
- Staging a car collision that involves unsuspecting drivers. In these cases, one can claim benefits from the insurers on account of false injuries.
- This type of fraud may also involve some human or financial costs. This is because unsuspecting drivers experience injuries.
- Filing claims for incidents that never happened such as vehicle theft, collision, and a break-in.
- Intentionally damaging or burning a vehicle.
- Filing false reports regarding theft or damage of a vehicle and its contents.
Fraud Prevention: Filing a Complaint with IBC
IBC (International Bureau of Canada) investigates insurance frauds, both on behalf of car owners as well as insurance companies. If you are a victim of insurance fraud, make sure you file a complaint together with adequate proof with this body.
This organization has got its member companies and works on behalf of them to detect organized crimes involving insurance frauds.
Reporting Fraud: What To Do?
In case you suspect insurance fraud, make sure to document your evidence or maintain a record. This would help you prove yourself before the law. Collect as many proofs as possible including emails, text messages, and voicemails. Insurance specialists recommend their clients collect other documents, including:
- Medical reports, if applicable
- Invoices and estimates
- Work orders
- Claim forms
- Bank records and financial transactions
- Any other related information
Remember, you need to prioritize personal safety. Try to avoid altercations or conflicts with your insurer. Try to document as much information as possible, which will assist the authorities to address your issue.
How To Record Vehicle Damage Fraud?
- Carry photographs of your car before the damage was inflicted. Also, document the car in photographs after the damage.
- Take photos both before and after repairs.
- Include every side of your car in the photographs, regardless of whether it has sustained damage.
- If possible, use a meter stick or a measuring tape to gauge the damage.
- Take a note of damages to your car that is not related to the collision.
- Report whether the car had airbags in it.
- In case you find any witness of the collision or related evidence on CCTV cameras, include it in your documentation.
- The dashboard camera of your vehicle might also be sufficient to record the incident.
How To Keep A Track of Injury-Related Fraud?
- It’s logical to personally maintain a record, involving all your appointments following the injury arising from the accident. Information regarding these activities would help the authorities examine the treatment dates and events.
- In case you are a healthcare provider, you might be a target of practitioner identity theft. In these cases, report the issue to a professional association, HCAI (Health Claims for Auto Insurers), or IBC.
- Residents of Ontario may also report injury-related insurance fraud anonymously to the FSRA (Financial Services Regulatory Authority of Ontario).
Endnote
Insurance frauds mostly involve car owners aggravating the damages while filing claims. However, unprofessional agents or insurance companies can also indulge in insurance frauds deliberately.
Whether you are the insurer or the car owner, you need to stay alert and guard against any possible vulnerabilities. It makes sense to consult an insurance specialist for professional assistance. In case you believe that you’re a victim of insurance fraud, the specialists might guide you on how to seek legal assistance.
Being a car owner, the best way to defend yourself against these frauds is to choose a reliable insurer or agent. In such cases as well, the assistance of insurance specialists proves invaluable. No wonder why most car buyers consult experts like Surex before making this crucial decision!
