Insurance Fraud In Ontario Is Costing Drivers

What is insurance fraud?

Insurance fraud is the intentional or unintentional act of deceiving an insurance company for financial gain. Committing this crime includes:

• Knowingly lying on an application
• Stating previous damage to a vehicle, along with damage
• Non-existent injuries
• Submitting healthcare claims after a person's recovery
• Making an injury or damage claim from an accident that never opened
• Automobile repair fraud

What is the punishment for insurance fraud?

The are many consequences for being involved in insurance fraud:

• Denial of claim: What you submit related to the false incident will be denied.
• Cancellation: Your policy can be cancelled.
• Trouble getting coverage: You could be denied car insurance in Canada.
• Jail time, criminal charges: You could also face jail time or fines.

Penalties for committing insurance fraud

Insurance fraud is a crime. You could face criminal charges and jail time if convicted, and potentially pay more for coverage by being flagged as a high-risk driver. The charges include:

• Insurance fraud under $5,000 carries a maximum sentence of 2 years of imprisonment.
• Insurance fraud over $5,000 carries a maximum of 14 years of imprisonment.
• Insurance fraud over $1 million carries a minimum sentence of 2 years of imprisonment.

According to the Criminal Code of Canada:

380 (1) Everyone who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretense within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,

• (a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars; or
• (b) is guilty
• (i) of an indictable offence and is liable to imprisonment for a term not exceeding two years, or
• (ii) of an offence punishable on summary conviction,
• where the value of the subject matter of the offence does not exceed five thousand dollars.

Examples of car insurance fraud

Unknowingly committing auto insurance fraud is surprisingly common in Canada. For example, registering a vehicle at a family member's address for a lower rate, or falsely listing a primary driver, are both fraudulent activities. This is just the tip of the iceberg; more serious types of insurance fraud are also prevalent. Here are some examples of fraud to keep an eye out for:

• Scopes of fraud: Make sure you are clear on what is considered insurance fraud in regard to your policy, claims, and actions from other drivers on the road.
• Be honest: Never knowingly provide false information to your insurer or when filing paperwork.
• Ask questions: If you are not sure, you are better off getting professional advice from a certified advisor.
• Keep detailed records: If you are involved in an accident, take accurate notes and photos. File claims with honesty.
• False stolen vehicle claims: Intentionally disposing of a vehicle and reporting it stolen to collect insurance proceeds.
• Illegitimate insurance sales: Beware of brokers charging fees for lower rates—legitimate brokers are paid by insurers. Scammers collect your information, lie to insurers, and leave you uninsured if you have an accident. Also, distrust low-premium ads mimicking real companies; they may be fraudulent.

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Always pay attention to what is happening on the road and around you. Trust your gut – if something seems off, you might be experiencing a scam. Keep If you suspect fraud, you can make an anonymous call 24/7 to 1-877-IBC-TIPS (422-8477) or use the IBC website.