Insurance fraud: red flags

Insurance rates and insurance fraud in Ontario have been a major topic of conversation for many years.

The government and insurance companies will continue discussing solutions and implementing changes.

We can have a conversation about whether these measures are effective or not, but right now we want to bring things down to the ground level. What are the nitty gritty everyday things customers and brokers can do to prevent fraud?

Often it’s small things like a strange email, an unknown phone number or distant address that raise red flags. In recent days, we encountered all of these red flags with a customer. That’s not at all to say the person was committing fraud.

However, it is our responsibility to verify that all information is accurate. We don’t want our customers, insurers or our own organization to be exposed to legal issues.

So what was going on?

First, the emails we received from the customer displayed a different name than what we had on file. Second, the customer repeatedly requested for documents to be mailed to their address. And the final piece was the customer’s address was outside the Greater Toronto Area.

Fortunately, there are steps we can take on our end to verify that we’re in integrity with our customers. We checked the address on the driver’s license and vehicle ownership to ensure they are the same and also match the address we have in our database.

The customer clarified that the different name attached to their email was a nickname. At that point, everything checked out and things were looking good.

Ultimately, fraudsters have a massive impact on everyone, including themselves. Worst of all, fraud is often caught only by accident when the dishonest individual slips up. Their activities raise insurance premiums for everyone. And while they think they’re winning in the short term, they’re actually losing greatly in the long run.

When their doings are revealed to the world, insurance companies will deny their claims, cancel their coverage and refuse to do business with them again. Depending on the extent of the fraud, they could also face substantial fines.

That’s not to say every red flag leads to a fraudulent policy. But it’s an extra reminder for us to be attentive and investigate anything that seems fishy. As brokers, we have a responsibility to read between the lines and do our role to mitigate fraud.

What’s your take? Drop us a comment below.