Fraud is costly for B.C. drivers

It is estimated that fraud adds between $100 and $200 per years to the auto insurance premiums of every driver in the province.

A new ad campaign puts the spotlight in insurance fraud.

A new ad campaign puts the spotlight in insurance fraud.

ICBC is continuing to fight insurance fraud, which it is estimated costs ICBC customers up to $600 million per year; or between $100 and $200 annually for each policyholder.

“We started a public awareness campaign [about fraudulent claims] in January 2016,” says Chris Fairbridge, manager of the special investigations unit for ICBC. “We saw a 70 per cent increase in tips from the public in the first quarter [of 2016], and an overall 66 per cent increase in 2016 over 2015.” In 2016, ICBC’s special investigations unit completed nearly 10,000 investigations.

“We want the public to better understand the role they can play so we can work together to best prevent fraud,” says Fairbridge. “Tips help us take action by investigating suspicious situations in order to protect the majority of our customers who file honest claims.”

Insurance industry studies estimate that fraudulent or exaggerated claims make up 10 to 20 per cent of all claims costs. “The goal of the campaign is to show British Columbians that exaggerating an injury for financial gain is wrong,” says Fairbridge.

He says that the campaign has a new ad, where a boy at school with his dad tells others that his father is a carpenter who can’t work because of a car accident, but adds that now his dad is off work the pair can build a treehouse and go mountain biking, and that his dad says he’ll “get a big pay out.” Fairbridge says that the new campaign is getting a lot of good feedback.

“Insurance fraud is not a victimless crime. It impacts everyone,” he says. A common type of insurance fraud is people exaggerating the extent to which they have been injured. “They tell us one thing about how injured they are, then go on with their lives.”

Another type of insurance fraud is people who have had an accident including older damage. “They include old damage with their [new] claim.” Fairbridge points out that ICBC has a number of ways to identify these cases, including seeing pictures of old damage on previous claims.

Organized fraud is also an issue, where people collude in a supposed accident. Fairbridge says that cellphone records can be used to help uncover this, and other, types of fraud. In one claim, cellphone records showed that people who were supposed to have been in the same car during an accident were talking to each other on their cellphones at the time the “accident” happened. “Why would they be talking to each other on their phones if they were all in the same car?”

ICBC expects that fraud detection and enforcement activities will reduce the corporation’s basic insurance claims costs by $21 million for policies written over the next year. A new high-tech analytics tool is now being used to search claims for instances of fraud, and it is anticipated that the new tool, along with more traditional fraud detection methods, will save up to $44 million a year by 2019.

“People need to be aware that we’re looking at everything,” says Fairbridge. “The results can include criminal convictions; the courts are taking this very seriously.”