MPI: auto insurance fraud increasing

Published: August 30, 2018

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It is widely accepted that auto fraud is rife in some markets, especially in Ontario. However, the Manitoba Public Insurance Corporation (MPI) says Manitoba is also experiencing increased auto insurance fraud.

“Disturbingly, the corporation’s special investigation unit is seeing an increase in fraudulent activity,” the public auto insurance provider says.

The insurer also discussed individual cases, such as a situation when the claimant said they could not return to work following a collision. After an investigation, insurers found the claimant was continuing full-time employment and was forced to repay $35,056 that was initially paid out by MPI.

 “While some frauds may be elaborate and highly planned, such as staged collisions or intentional vehicle arson, auto insurance frauds can also be less overt,” MPI said. “Examples may include exaggerating personal injury, claiming income replacement indemnity when able to work, claiming unrelated or pre-existing vehicle damage, or providing a false or misleading account of how a crash happened.”

Across Canada, auto insurance fraud is estimated to cost companies $2 billion per year, although a majority of the loss is in Ontario.

In May, Aviva Canada called for reporting auto insurance fraud to become mandatory for all insurers. Gordon Rasbach, vice president of legal and fraud management for Aviva Canada has urged Canadian insures to follow the lead of other nations in the way auto insurance fraud is reported.

In Ontario alone, auto insurance fraud costs insurance customers $547 million, Rasbach estimates. This cost is pushed back onto consumers in the form of higher premiums and is a major reason why the province is the most expensive auto coverage market in Canada.