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6 minute read Published on Jul 29, 2026 by BrokerLink Communications
When most Canadians hear the term “insurance fraud,” they often think of staged accidents and organized crime. While these types of scenarios do happen, insurance fraud isn’t always as dramatized or even as obvious as you may think. It can be something as simple as over-exaggerating the value of your stolen belongings, omitting information on insurance documents, or submitting receipts for claims that have nothing to do with your claim at all, the impact of insurance fraud affects numerous parties involved, not just the insurance company.
Insurance fraud can increase premiums, slow down the claims process and increase costs across the industry as a whole. Whether you’re buying coverage for your car, home, business, or family, knowing how fraud works can help you avoid potentially costly mistakes in the future. Key takeaways:
Insurance fraud costs Canadians an average of $3 to $5 billion a year.
Common examples of insurance fraud include staged accidents, exaggerated insurance claims, false receipts and misrepresenting information when applying for coverage.
Identity theft and insurance fraud sometimes occur together.
If you notice something suspicious, contact your insurance broker as soon as possible.
Insurance fraud happens when someone intentionally provides false, misleading or incomplete information for financial gain in the form of a claim payout, lower premiums, coverage approvals or other benefits that wouldn’t otherwise be available to them. Common types of insurance fraud include:
Claims fraud: Fraudulent claims include making claims of false losses, exaggerating damages or staging collisions or other accidents to receive compensation.
Application fraud: Providing wrong information when applying for insurance.
Premium fraud: Intentionally misrepresenting details to secure lower rates.
Third-party fraud: Fraud involving repair facilities, health care providers, contractors or other organized groups.
Identity-related insurance fraud: Using stolen personal information to purchase insurance coverage, file claims or conceal true identity.
Insurance fraud isn’t limited to a single type of insurance coverage. It can happen across the industry and may look different depending on the unique scenario:
Examples of auto insurance fraud include staged collisions, fake injury claims, inflated repair costs, fraudulent vehicle theft reports or providing incorrect information about your home address to get a lower insurance premium. In some scenarios, drivers may also fail to inform their provider of all the drivers using their vehicle, which can create problems later on, if a claim is filed.
Home insurance fraud typically happens after a loss has occurred. It could look like claiming stolen items that actually weren’t taken from your home, submitting false receipts, attempting to include old damage in a new claim or even overstating the value of your damaged property.
Business insurance fraud may involve false payroll information, staged damages, false liability claims or over-exaggerated property loss. As business insurance policies are complex, accurate reporting of information is essential when purchasing coverage from an insurance provider and when filing claims.
Examples of these include recording false medical information on applications, exaggerating the extent of injuries or disabilities, billing insurance companies for treatments and services that you never received.
Travel insurance fraud can take on may forms. This includes making fake baggage claims, altering travel documents, inflating emergency medical expenses or submitting false claims for cancelling an upcoming trip.
Unlike the other forms of insurance fraud, application fraud occurs before an insurance policy is issued to a customer. Application fraud occurs when someone knowingly provides inaccurate information about their driving history, property use, recent renovations on their home, business operations, factors that influence their risk profile and more.
According to the Canadian Anti-Fraud Centre, only approximately 5% to 10% of fraudulent activities are reported. Below are certain red flags you need to be aware of, that could help you identify suspicious claims that will help you with your reporting process. While they don’t automatically mean fraud is happening, they may suggest that the situation needs to be looked at a bit closer:
Scenario
Possible red flags
What to do
Car accident
Pressure to use a specific repair shop, conflicting accident details, exaggerated injuries
Contact your insurance company before making any decisions.
Home repair claim
Door-to-door contractors, urgent payment requests, unusually high renovation estimates.
Obtain multiple quotes, look at past reviews and verify contractor credentials before signing any contracts.
Claim documentation
Missing receipts, changed invoices, inconsistent claim timelines
Keep a copy of all records and request clarification if any information doesn’t make sense.
Identity misuse
Policies, bills or claims you don’t recognize under your name.
Contact your insurance company immediately to investigate possible identity theft.
Application information
Incorrect address, occupancy details, vehicle use or claims history.
Correct the information with your insurance company as soon as possible.
Provider billing
Charges on your card or bank account for services you never received.
Request itemized statements and notify your insurance provider immediately.
If you recognize any of the warning signs above and believe that fraud may be happening in real-time, here’s what you need to do:
Be safe: Don’t confront the person directly, as doing so can put you at risk of harm.
Document what you know: Keep records of all dates, names, phone numbers, emails, invoices, claim documents, receipts and other information.
Contact your insurance provider or insurance broker: Explain the situation to them and provide supporting information that you have collected.
Review documents: Never sign a form before you’ve read it over or allow someone else to submit information on your behalf before reviewing it first.
Report the suspicious activity: Depending on the situation, you may need to contact the police and start an investigation or submit your report to the Canadian Anti-Fraud Centre.
Maintain a record of all communications: Keep digital and physical copies of notes, conversations, case numbers, emails and more.
Need help? Contact a BrokerLink broker today.
To prevent fraud in your everyday life, here’s what you can do:
Be accurate on applications: Always be truthful about your insurance information.
Keep records: Save all receipts, photos, contractor estimates, repair invoices, police reports and other claim-related information.
Work with a trusted professional: Work with a BrokerLink broker, qualified service providers and reputable insurance companies.
Watch out for pressure tactics: Be aware of people who may encourage or pressure you to sign documents quickly, use certain vendors, pay large upfront fees, share personal information or exaggerate damages.
Protect your identity: Use strong passwords, enable multi-factor authentication, store your important documents securely and monitor all communications.
Review your insurance policy regularly: Understand your coverage, deductibles, limits, exclusions and claim requirements to prevent possible confusion.
Car insurance fraud can happen before, during or after a collision. Common examples include:
Staged accidents
False injury claims
Inflated repair estimates
Tow truck or repair shop pressure
Fake vehicle theft
Misrepresenting vehicle use, address or drivers
Accident benefit fraud
Home insurance fraud often arises after property damage claims or other covered losses like third-party claims. Common examples include:
Fake receipts for stolen or damaged items
Claiming pre-existing damage as new damage
Contractor scams after severe weather
Inflated repair invoices
False occupancy or rental-use information
Exaggerated damage after storms, fires, floods or thefts
Fraud can also occur when policyholders seek to purchase insurance. Common examples include:
Using false information to avoid higher premiums.
Failing to disclose regular drivers for a vehicle.
Misrepresenting business use of a car.
Not disclosing rental or short-term rental activity.
Omitting previous claim information.
While these are different crimes, they can sometimes overlap. Identity theft occurs when someone steals your personal information. In contrast, insurance fraud occurs when false information is used to obtain money or other benefits. Your identity may be stolen and used to:
Start an insurance policy.
Submit a fraudulent claim.
Conceal the true identity of the fraudster.
Access another person’s policy information.
Redirect claim payouts.
To protect yourself from falling victim to identity theft:
Avoid giving out personal information over the phone or by email.
Lock your important documents in a safe.
Monitor your accounts for suspicious activity.
Insurance fraud impacts numerous parties and can often lead to:
Higher premiums for everyone in Canada.
Longer claim processes.
Increased document requirements.
Greater investigation costs.
Denied claims.
Policy cancellations.
Difficulty obtaining coverage in the future.
When dealing with any form of insurance here’s what you shouldn’t do:
Provide insurance or personal information to unverified callers, texts or emails.
Exaggerate damages or losses.
Submit fake receipts or altered documents.
Sign blank claim forms.
Allow someone else to submit a claim without reviewing it yourself first.
Ignore policy documents, bills or claim notices you do not recognize.
Misrepresent your address, vehicle use, home occupancy, business operations or claims history.
Together with the help of the government, insurance providers, and people like you, we can all work towards eliminating insurance fraud, and you can have peace of mind knowing that your premium contributions are only going towards genuine, lawful claims.
If you have any further questions or concerns about insurance fraud and how it impacts you, contact BrokerLink today. You can reach us by phone, email, or in person at any one of our locations throughout Canada.
