There is a great article in today’s Globe and Mail (thank you to the Ontario Insurance Law Blog for the link) regarding the Insurance Bureau of Canada‘s recent warning around staged automobile accidents. The IBC notice, which went to all insurers across the country, states that Southern Ontario “has become a virtual haven for fraudsters as jurisdictions in the U.S. beef up their ability to crack down on fraud”.
The article goes on to talk about Toronto being the real source of the problems – and even draws the connection of the problems to both organized crime and the recent automobile reforms that were put in place as of September 1, 2010. It notes that staged accidents are no longer the simple route being used, but new “target and bullet” schemes, where an innocent driver is targeted and intentionally hit. The IBC estimates that $1.3 billion per year is spent on fraudulent accident benefits claims.
Other jurisdictions – primarily in the United States – have cracked down with co-ordinated efforts, including the FBI. In Ontario, we cracked down with minor tinkering to broken legislation. You tell me – are the new regulations going to really solve the problem of fraudulent claims, or are there just going to be new ways found for the less scrupulous folks to find their way into the insurer’s pockets. I’m already seeing evidence of the latter.
