Beware of auto insurance fraud

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Ontario, along with other provinces, continue to tackle auto insurance fraud and unfortunately it’s consequences are far reaching.

It’s difficult to peg the overall impact of auto insurance fraud, but a survey conducted by KPMG Forensic says that nine to 18 per cent of annual insurance claim costs in 2010 were fraudulent, which cost the industry about $769 million to $1.56 billion. But drivers  are feeling its sting with fraud bumping up insurance premiums by between $100 to $200, according to the Toronto Star. There’s good news for drivers since the Ontario government has pledged to reduce the province’s auto insurance rates by 15 per cent within two years.

Recently, three Toronto rehabilitation clinics were convicted of auto insurance fraud where it’s estimated they paid out $4 million in fraudulent claims, according to the Insurance Bureau of Canada. McCowan Rehabilitation Clinic, Physiotherapy Clinic and North York Health and Rehabilitation Clinic were convicted during Toronto Police’s “Project Whiplash,” which investigated a staged auto accident ring.

The rehab clinics were found guilty of knowingly making a false or misleading statement to an auto insurer to obtain payment for goods and services provided to an insured and engaging in unfair or deceptive acts or practices, which resulted in the maximum penalty of $100,000 per conviction.

Ontario is tackling auto insurance fraud with the establishment of the Auto Insurance Anti-Fraud Task Force in July of 2011. The government has also adapted regulations to curb auto insurance fraud and abuse, which includes banning providers from signing blank claim forms, requiring claimants to confirm attendance at health clinics, requiring insurers to provide claimants with reasons for denying a claim and ensuring claimants receive a detailed, bi-monthly statement of benefits paid out on their behalf.

Meanwhile, drivers can avoid auto insurance fraud by not using referrals recommended to them while they’re at the scene of an accident, whether it’s legal services, a health clinic or a garage to fix their car, Kristen Rose, a spokesperson of the Financial Services Commission of Ontario, told the Toronto Star. Also, drivers should avoid buying car insurance from online ads, she added.

If you suspect you may have encountered auto insurance fraud, you can anonymously contact the Financial Services Commission of Ontario using the Auto Insurance Fraud Information Hotline at 1-855-5TIP-NOW or submit a tip online.

The personal injury and accident lawyers at Neinstein Personal Injury Lawyers will ensure that the accident benefits you claim are legitimate. We have been dealing with all accident related issues throughout Ontario for over 45 years. We know how to get you the compensation that you deserve and get your life back in order after being in a car accident. Call us at 416-920-4242, set up a free consultation, and come speak with us.

Greg Neinstein, B.A. LLB., is the Managing Partner at Neinstein Personal Injury Lawyers LLP. His practice focuses on serious injury and complex insurance claims, including motor vehicle accidents, slip and fall injuries, long-term disability claims and insurance claims. Greg has extensive mediation and trial experience and has a reputation among his colleagues as a skillful negotiator.
Greg Neinstein
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