The Insurance Bureau of Canada (IBC) has encouraged both brokers and their clients to join the fight against auto insurance fraud in a recent release.
March is Fraud Prevention Month, and the IBC took the opportunity to highlight how fraud is hurting the entire industry.
“Auto insurance fraud is a serious crime that costs Canadians billions of dollars each year,” said IBC national director of investigative services Garry Robertson. “It’s an illegal, organized big business, largely unknown to consumers, that siphons resources away from our health care system, ties up our emergency services and courts, and drives up insurance costs.”
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Brokers are encouraged to advise their clients the following to prevent auto insurance fraud:
- Do your homework when purchasing a used vehicle – Consumers should not only select a reputable dealer to purchase a used vehicle from, but should also check IBC’s VIN Verify Service to see if the car has been given a new vehicle identification number (VIN) to hide that it was previously considered a non-repairable car.
- Avoid staged collisions – Policyholders should never tailgate, and should call the police if they suspect they have been a victim of a staged accident.
- Take extra care if you are involved in a collision – Policyholders should document as much as they can of the accident’s details, and should contact their insurance representative as soon as possible.
The release also explained that the P&C industry is becoming increasingly sophisticated in detecting and preventing fraud. The IBC and P&C insurers work closely with analytics company CANATICS to identify possible fraudulent activity perpetrated by organized crime rings that stage collisions and the service providers and/or vendors that collude with the criminal organizations.
The bureau and insurers also work with law enforcement agencies, both the federal and provincial government, insurance broker organizations, and other stakeholders to raise awareness and to coordinate to combat fraud.
“Insurers and their partners are already playing a significant role in reducing instances of auto insurance fraud. However, it is important that consumers know what to look for and to avoid becoming victims,” Robertson added.
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