How insurers can find insurance address fraud

Published: September 21, 2018



One of the most common type of insurance trickery is address fraud. This is a fraud that is not just committed by criminal rings but also by individuals who see an easy way to get cheaper coverage. However, there are things insurance companies can do to both find address fraudsters and prevent them.

In Ontario, auto insurance companies use location as one of the defining factors for assessment of premium costs. It is a controversial method that means one person located on one street could be paying significantly less than a person on the next street, if a postal line lies between.

For some customers, it is tempting to say they live in a location where they do not actually live. This may not be wholly nefarious like saying a home that the customer has no connection to. Instead, it may be pretending they still live with their parents when they actually live somewhere else. The problem in this situation is the car would not be located and/or stored at the parents’ house.

Andrew Grayson, an insurance defence lawyer with Regan Desjardins LLP in Toronto, says insurance companies with proof of address fraud can start by asking their underwriting team to find out the insurance cost for the given address.

“You can go as far as to say to them, ‘Would you void the policy if they keep going at this rate [and] say they live at this address?’” Grayson said. “Sometimes, depending on the insurer, they might.”

Grayson was speaking at the Canadian Association of Special Investigation Units (CASIU) 2018 Fraud Conference, which was hosted at the BMO Institute for Learning in Toronto.