The Cost of Insurance Fraud in BC
If you regularly read this blog you know I hate insurance fraud. When fraudulent claims are weeded out that’s a good thing. However, I equally dislike the cost of fraud being blown out of proportion.
Have you ever heard sound bites that insurance fraud is on the rise or spiralling out of control? If you have a quick look behind the sound bite is important.
Occasionally the insurance industry provides press releases discussing the high cost of insurance fraud. Often these are accompanied with the suggestion that some sort of ‘reform‘ is needed before fraud makes the system unsustainable. We don’t get much of this nonsense in BC but in other parts of Canada this is an old song and dance. The reforms that are urged typically boil down to stripping individual rights for the benefit of insurer profits.
So what is the hard data behind insurance fraud statistics in BC? It turns out, at least insofar as auto insurance claims are concerned, that there is no data.
The BC Utilities Commision recently asked for data addressing auto insurance fraud in BC. Here is the exchange:
Other Provinces, Ontario in particular, have had a lot of discussion of the high cost of fraud. A number is often put to the cost of fraud without any hard data to back it up. It is important to look behind the sound bites to see what actual data the insurers have when they make such allegations. Perhaps other Canadian insurers will be as willing as ICBC to show their hand and reveal what actual data they have. Turns out, there may not be any.