Friday, 16 March 2018 22:20

Fraud Investigation Signals Need For Auto Insurance Reform in Canada

Written by Robert Tuomi, The Square
Fraud Investigation Signals Need For Auto Insurance Reform in Canada Photo by Ian Shalapata



Action Plan

• Aviva’s plan starts with banning referral fees, which it says take unnecessary cash out of the system. The fees benefit third-party suppliers, but not consumers.


• Second is a prohibition on blank work orders and banning any supplier from asking consumers to sign them.


• Next, there should be discounts to customers who agree to use an insurer’s accredited repair network.


• Insurers should be forced to report all identified fraud and investigation outcomes so that data is shared.


• The final point is to increase penalties for suppliers of auto parts and related materials who abuse consumers or defraud insurers.


Rasbach concluded that honest drivers, “who may have been a victim of fraud without their knowledge, or are paying for it through higher premiums, deserve better.”


On the investigation, Aviva had all damaged vehicles assessed by an independent appraiser. Of the nine vehicles on which fraud was eventually identified, the original assessment for total damages was $27,657.15. After the shops completed work on those same nine vehicles, the total billings came to $58,328.40.


After the repairs, the insurance company’s investigators re-inspected each vehicle to assess what was actually done against what was billed. This revealed that $33,179.74 of the $58,328.40, or 57 percent of the total cost, was fraud.


This was due either to the parts and labor not being installed or completed as invoiced, or because the parts and labor were attributable to additional deliberate damage caused by the shop itself.


We thank The Square for reprint permission. 

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