Aviva Canada says Toronto car insurance fraud remains rife

Published: September 11, 2015

Updated: July 24, 2018

Author: Luke Jones

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Ontario is a hotbed of car insurance fraud. It is something the industry acknowledges, the government attempts to regulate, and the consumer unfortunately accepts. The Greater Toronto Area (GTA) is the epicenter of insurance fraud within Ontario and indeed Canada as a nation, something Aviva Canada reiterated on Friday.

One of the largest insurance providers in the nation, Aviva Canada is arguably best place to discuss the state of fraud within the Greater Toronto Area. The company released a statement on Friday that claimed insurance fraud is estimated to cost multi-billion dollars a year in insurance premium, healthcare, emergency service and court costs. The company added that it is starting three separate insurance fraud cases in Toronto and its surrounding area.

Insurance fraud is at epidemic levels in Toronto, with policy holders trying to get insurance payouts on false claims, or as it is sometimes called, an “insurance job”. Other insurance fraud methods involve someone setting up a car insurance policy under a false name or by providing false details to get a lower premium.

Aviva Canada does not just supply car insurance and the company says while other areas (home, health, and life coverage) are subject to fraud, it is rife in the auto sector in the Greater Toronto Area. The result of high insurance fraud rates has been the rise of premiums for law abiding citizens in Toronto and the Province of Ontario as a whole.

The most populated province in Canada is subject to the highest average auto insurance rates in the country, some 36 per cent higher than anywhere else. Aviva Canada said in April that is has now discovered 50 different methods that can be used to defraud the company and along with other insurance providers in Canada promised to clamp down on fraud.

Companies have set up dedicated “crack teams” within their organizations whose sole purpose is to root out fraud and make sure that it does not go unpunished. It is a much needed step in the right direction as statistics show that at least 15 per cent of all insurance claims go to fraudulent behavior. This impacts normal premiums negatively as $225 of an average premium of $1500 is spent on paying out fraudulent claims.

While the police are taking more action, there is no specialist branch of law enforcement that deals with insurance fraud in Canada, so the private companies and Insurance Bureau of Canada are left to try and deal with the problem themselves.