Car and auto insurance is a funny thing in that has become almost like a commodity, a utility payment – you have to have it in order to be able to use your car, and it seems to get more expensive each year.

So what is the premise behind car insurance anyway? Well, like any insurance, it was originally designed to do the following. It is like setting aside money, in increments, each month, to pay for damaged (car) property by people who usually wouldn’t have the kind of money available when that day comes. And it will come, for all of us. Car accidents happen. In a nutshell, it’s like putting aside $100+ each month into an account from which you withdraw should the need ever arise to pay for damages to your car or the suffering of others. The difference is that if you have to pay out 10s of $1,000s after only two months of “savings”, your insurance coverage handles the payout, whereas you would only have a couple hundred saved up. The reason insurance gets more expensive, is that it’s being taken advantage off by people who treat it like a cash-pay-day. Yup, lots of classic car insurance fraud going on, especially in Ontario car insurance. Its among the worst for car insurance fraud in the world!

A recent case in Ontario saw an insurer successfully sue an insured to recover $150,000+ paid out in a car – auto insurance claim. Three defendants had been involved in a parking lot incident and proceeded to milk the insurance for all it was worth in payments for damages, medical fees, etc. Expert witnesses testified the resultant sideswipe of their vehicle by a van in a parking lot should not have resulted in the types of damages to body and property that were claimed by the three occupants in the affected vehicle.

The notion of staging vehicle crashes in order to cash in on insurance payouts is not new, and there are several documented cases of scam artists operating in this manner. Most cases come from isolated incidents but increasingly there are instances of people loading up a van with several passengers paid to basically fake injuries in a crash situation.

A damage reporting centre and sympathetic legal and medical service providers take care of providing the necessary paper work and the insured basically collects $1,000s in insurance claims while doling out a pittance to participants for their slight inconveniences in time.
The cost is born by the rest of us car and auto motorists who happen to live in the same area, usually for the rest of our insurable lives.

It was good to see a car – auto insurance broker actually go after abusers of the system, rather than just rolling over and saying “just pay it out. We’ll recover the money in no time anyway from the premiums of others.”

Hopefully, more will follow suit.

Learn more now about car insurance now.