Auto Insurance Fraud – Ontario’s Runaway Train?

Aug
2010

It’s a fact: fraud costs in Ontario vehicle insurance dramatically exceed that of any other part of the country.

And Ontario drivers are paying heavily for that dubious distinction.

It is calculated that of Ontario’s $9 billion in annual auto premiums, $1.3 billion is paid out on suspected fraudulent claims – and not for glass and metal. Most of the fraud involves false claims for physical injury and accident benefits.

That has helped to inflate the average claim by almost 80% from what it was in 2005. Most of this involves opportunistic claimants, unscrupulous rehab clinics, multiple assessments of the scope of injury. The result is inflated monetary values, poor-quality treatment, and rising premiums.

Some troubling stats:

Ontario’s average automobile bodily injury claim is now $53,000; by comparison, Alberta’s is well under $10,000.
in some Ontario auto rehab clinics, average claims were almost 20 times higher than the costs associated with similar injuries rehabbed thru Worker’s Comp programs.

But help is on the way – sort of.

Ontario auto reforms effective September 1^st are designed to eliminate non-essential and multiple assessments of injuries, making the process to treatment shorter and more efficient. (Generally speaking, injuries that are treated more promptly have a better track record in terms of shorter rehab period and more complete recovery.)

Additionally, injured parties are to get a summary of healthcare funds spent by their insurer on rehabilitation and treatment.

But premiums are rising – and will continue to increase until fraud is substantially under control.

For more technical information on the September 1st automobile changes, click here.

source: RBC Insurance roundtable (as reported by Canadian Insurance Top Broker)

Tags: Automobile, broker, claims, coverage, damage, fraud, insurance, ontario, premium, reform, risk, september 1

Comments

15 comments

August 6, 2010 at 11:27 am

Hopefully this will resolve the situation, unfortunately the consumer will pay the price until it does.

August 6, 2010 at 1:44 pm

It’s truly amazing as to the cost to bounce someone back,
from an accident. There should be some changes with the
new limits in play… However how long will it take to show postive results- Can the average working man keep on
paying???

August 9, 2010 at 3:58 pm

It’s amazing how so many people can get away with Auto Insurance Fraud. Hopefully this will help resolve the situation and get Ontario Auto back to where it should be for accident benefit claims and be able to reduce the rates again to pass onto the consumer.

M.R.

August 10, 2010 at 10:10 am

I think it about time the Goverment step in and made these changes, it will be worth it in the long run.

August 10, 2010 at 10:40 am

I wonder what the average Ontario bodily injury claim would be if the GTA bodily injury claims weren’t taken into consideration? And I only wonder that because of the numerous accident fraud rings that have been busted in that area.

August 11, 2010 at 8:27 am

Those are some very troubling stats. It seems impossible to be that much when compared to Alberta. Something needs to change. Hopefully the reform is a solution!

August 11, 2010 at 8:31 am

Some troubling stats. Hopefully the new reforms will help weed out the illegitimate claims.

August 11, 2010 at 8:38 am

It will be interesting to see if we will see much of a reduction in fraudulent claims with the new auto reform.

August 11, 2010 at 9:59 am

It is sad that the general Ontario public has to pay the price because of these unscrupulous individuals. Hopefully the auto reform will remedy this situation.

August 11, 2010 at 11:54 am

The abuser are milking the system which causes rates to be increase. How can we stop the fraudulent claims so that the consumer will get a break on their rates?

August 11, 2010 at 1:18 pm

Hopefully the new auto reform will eliminate the accident fraud rings altogether.

August 11, 2010 at 2:43 pm

Ontario Auto Insurance Consumers should be made aware of these alarming statistics. Current information by the media falls short of the facts.

stevie j

August 11, 2010 at 3:53 pm

is this really going to make a difference? they’ll find loop holes somewhere.

August 12, 2010 at 8:45 am

I also hope this new reform will control fraudulent claims … although hopefully everyone will be treated fairly and not all painted with the same brush.

August 12, 2010 at 8:59 am

If Alberta can do it, why can’t we??