Now, thanks to organized crime rings, many car accidents being claimed are either staged or have never even occurred at all.
Insurance fraud is a serious national problem that costs Canadians an overwhelming 3 billion dollars per year. How does this happen? Criminals, paralegals, registered healthcare providers, and tow-truck operators all cooperate to whip up insurance fraud stories. Since reusing the same names to conduct fraud would be suspicious, they then recruit outsiders to participate in exchange for fast cash. One possibility is that they recruit people to fill two cars that purposely get in a crash. Another possibility is that they recruit two cars’ worth of people and crash two empty cars together in a parking lot. The “victims” are then fed stories to recount. Some fraud “accidents” even involve innocent drivers, posing a threat to the safety of innocent Canadians. For instance, in the “swoop and squat” technique, two cars box in a driver while a third car cuts in front and brakes forcefully, causing the innocent driver to rear-end the fraudster.
Insurance companies lose billions of dollars each year to insurance frauds. But it’s not only the insurance companies that suffer – many of the costs are paid by Canadians in the form of higher premiums. It is estimated that insurance fraud costs make up 10 to 15% of premium costs.
Fortunately, we are not completely at the mercy of insurance crime rings. The Insurance Bureau of Canada’s fraud squad has been working with police forces to detect insurance frauds for over 80 years. It claims to save insurance companies and policyholders millions of dollars each year. However, the problem is far from solved, as the cash appeal of insurance frauds continues to lure both industry insiders and outsiders every year.