Auto insurance fraud costs insurance companies as much as $1.6 billion per year in Ontario alone, and it is quickly becoming a multi-billion dollar problem in Canada.
Staged collisions are a form of insurance fraud and are most often fender-benders or minor accidents intended to appear like you are at fault. For example, one of the most common car insurance scams is the ‘Swoop-and-Squat’ where another driver cuts in front of you, then brakes suddenly causing you to rear-end them.
Whether or not a collision was orchestrated, if you are at fault during an accident, it is still your responsibility to file a claim and work with the other driver to ensure the incident is resolved.
As a driver, you are always responsible for your actions behind the wheel. It is important to take every collision seriously and know the steps of what to do in an accident.
There are some tell-tale signs you should be aware of that could indicate that you’ve been involved in a staged collision. Here are some ways that you can be aware of what other drivers are doing on the road and protect yourself.
• If the collision seemed avoidable, it probably was. Be cautious of other drivers gesturing for you to proceed when they have the right of way. They could accelerate suddenly and cause a collision for which you would be deemed at fault. Always be sure to follow the rules of the road.
• If the damage is severe enough, always contact the authorities. Be wary if the other driver is reluctant to call or report the accident to police. In Ontario, if the damage to your vehicle is major and exceeds more than $2,000, report the accident to the police and visit the closest Collision Reporting Centre. In Alberta, you must notify police when the total damage exceeds more than $2,000.
• Always be sure to take pictures of the collision and obtain all relevant information from the other driver including their insurance details and license plate number. Do not agree to settle the dispute outside of insurance, always report the claim to your insurance carrier and contact your BrokerLink Broker to discuss your options. Additionally, take note of how many passengers were in the vehicle. Some fraudsters will attempt to create fictitious passengers to increase their claim settlement.
• One of the most common situations in a staged collision involves the other party exaggerating or creating injuries. If the injuries seem unrealistic for the level of collision be sure to take note.
• If possible, it is best to use your own roadside assistance service if your vehicle requires towing following a collision. If you do not have roadside assistance, be wary of tow truck drivers who happen upon the scene of an accident as they could be part of the scam. At the very least, always ask to see a business license and never sign any documents that are not fully filled out by the driver. To be safe, always use service providers you trust and feel comfortable working with.
By adopting good driving habits you can reduce the likelihood of getting into an accident, getting a traffic ticket or injuring someone on the road. For a driving refresher refer to these tips on how to become a better driver.
Reporting an insurance scam
In April of 2015, Canadian National Insurance Crime Services (CANATICS), a not-for-profit organization created by the auto insurance industry was established to help fight auto insurance fraud and provide tools to help consumers identify suspicious claim activity.
CANATICS uses state-of-the-art technology to identify suspicious auto insurance claims and notify the respective insurers.
There are many things that can affect your insurance premium, but fraudulent scams should not be one of them.
If you have questions regarding what to do in the event of an accident, talk to your BrokerLink broker. They will be happy to provide you with information and answer any questions you might have.