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The task of tackling fraud


The government’s Auto Insurance Anti-Fraud Task Force can’t determine how bad the problem is.

This shouldn’t come as a big surprise to Ontarians.

The two accounting firms hired, one by the Insurance Bureau of Canada, the other by the Ministry of Finance, can’t completely agree on the numbers either.

KPMG’s report, on behalf of the industry concluded “there is insufficient information to provide a precise and statistically based estimate of auto insurance fraud in Ontario.” But they did give a wide range on the cost of fraudulent claims “amounted to between $769 million and $1.56 billion.”

That tacked on another $116-236 onto the average premium.

Ernst & Young, brought in by the government to evaluate the report for their task force noted “KPMG’s report may significantly underestimate the extent of overall auto insurance fraud in Ontario because it does not specifically address premeditated fraud.”

It’s little wonder there is confusion.

One thing we do know for sure is Ontarians pay the highest insurance premiums in the country.

Even Ontario’s Auditor General Jim McCarter pointed out the glaring flaws in the system in his annual report in December. He noted between 2005 to 2010, the total cost of injury claims rose 150%.

During the same time frame, injury claims were up only 30%.

And the average cost of accident injury claims is five times higher than any other province.

This is unacceptable.

So too is the adversarial relationship between the insured and the insurance company. Too often the insured is stymied in trying to obtain the very benefits specified in the insurance policy. This results in the retaining of lawyers which results in lawsuits.

Yes there is fraud, too much in fact.

So why haven’t insurers done a better job in combating fraud? Why is the brunt of combating fraud placed on the backs of legitimately injured people? Questions that need answering, but won’t be by the task force.

That’s not part of their mandate.

But there are some encouraging recommendations so far.

And this is the time to get it right. If we don’t, the problem is going to get worse

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