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How fraud drives up (auto insurance) rates

Guthrie Insurance

Source: Jared Lindzon Special to The Star, Published on Wed May 01 2013

According to the Insurance Bureau of Canada, auto insurance fraud cost the province of Ontario approximately $1.6 billion last year, adding between $116 and $236 to the average (car) insurance bill.

According to the Insurance Bureau of Canada, auto insurance fraud cost the province of Ontario approximately $1.6 billion last year, adding between $116 and $236 to the average insurance bill.

While the provincial New Democratic Party has demanded a 15 per cent cut in auto premiums to supplement these rate increases, Premier Kathleen Wynne has suggested she is more interested in tackling the problem at its core.

A task force set up by Finance Minister Dwight Duncan found a staggering 83 per cent of the offenders in Ontario were based in the GTA. While those who commit insurance fraud by squeezing a few extra dollars out of their provider might consider it a victimless crime, those dollars add up to a collective increase in insurance costs province-wide.

Common types of auto insurance fraud

One of the most basic forms of insurance fraud occurs after an incident when a driver tries to claim unrelated damages to a vehicle. This can be prevented by carefully documenting the incident, taking pictures of the cars, and taking note of what damages were likely caused during the incident, and what may have occurred previously.

Another common form of insurance fraud is making a claim for injuries that don't actually exist. It's important to take careful note of the driver's condition immediately following a collision.

What to do when you witness insurance fraud

Victims of insurance fraud should contact the police as soon as possible, and bring all documentation of the incident, or call the Insurance Bureau of Canada's toll-free 24/7 tips line at 1-877-422-TIPS, or submit a confidential tip online.

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