Recently Canadian Underwriter reported that insurance fraud costs Canadian insurers over $540 million annually. The article highlights the fact that “Insurance companies around the world are reporting a higher number of bogus claims from cash-strapped motorists, homeowners and other con artists“.
Insurance companies, however, are not the hardest hit victims of insurance fraud. Legitimately injured people are.
This is the reason why I hate insurance fraud. It’s not just that fraud costs ICBC and other insurers money. It’s not just that fraud compensates undeserving people. It’s not even that insurance fraud is a crime. The main reason why I hate insurance fraud is that it casts doubt on legitimate claims.
When insurance companies process thousands of claims, a few fraudulent ones will appear. If an adjuster deals with enough of these it’s natural to develop a level of skepticism. This skepticism can then go on to skew the way legitimate claims are perceived. This in turn results in some deserving individuals being denied their needed insurance benefits.
When insurance companies suspect fraud they have significant resources to pursue claims for damages, claimants who are denied disability or other insurance benefits are not always so fortunate. When statistics are published about insurance fraud remember that deserving claimants are the greatest victims of this crime.