Following December’s news that ICBC had generated its first results from a new high-tech tool which will help identify and target fraudulent claims, the corporation is now reminding British Columbians, through a new advertising campaign, of the serious nature and cost of insurance fraud.
“The goal of this information campaign is to show British Columbians that exaggerating an injury for financial gain is wrong,” said Chris Fairbridge, ICBC’s manager of the Special Investigation Unit (SIU).
Most claims are honest, but insurance industry studies estimate that fraudulent or exaggerated claims make up about 10 to 20 per cent of all claims costs. Applying those estimates means that fraud and exaggeration is costing ICBC customers up to $600 million a year, or more than $100 a year for each ICBC policyholder.
The 2016 public information campaign sparked a 70 per cent increase to ICBC’s fraud tips line in the first quarter. Overall last year, the fraud tips line received nearly 1,900 calls – a 66 per cent increase over the volume of tips in 2015.
“We want the public to better understand the role they can play so we can work together to best prevent fraud,” added Fairbridge. “Tips help us take action by investigating suspicious situations in order to protect the majority of our customers who file honest claims.”
In 2016, ICBC’s Special Investigation Unit completed close to 10,000 investigations.
ICBC expects fraud detection and enforcement activities to reduce ICBC’s basic insurance claims costs by $21 million for policies written over the next year. And ICBC estimates all of these activities, including use of the analytics tool, will save up to $44 million a year by 2019.
The most common types of insurance fraud include false claims, exaggerated claims and organized fraud. An example of a false claim is when an owner fabricates a story about their vehicle being stolen when it was actually disposed of by the owner. Exaggerated claims are when a driver or passenger embellishes a claim by overstating their injuries or the damage to their vehicle. And organized fraud is a planned event such as a staged collision.
British Columbians can further protect their wallets by reporting suspicious activities related to insurance fraud to ICBC’s toll-free tips line at 1-800-661-6844. Tip information is confidential and callers can remain anonymous. For more information, visit icbc.com/fraud.
Here are some of ICBC’s 2016 fraud files:
Exaggerating the impact
A woman involved in a minor rear-end crash in 2013, which caused approximately $1,100 worth of damage to her vehicle, claimed more than $200,000 in pain and suffering and other damages. The B.C. Supreme Court judge had serious concerns about the woman’s credibility and found she “attempted to mislead the court and exaggerated the impact of the accident on her physical condition and her ability to work.” In the end, the judge awarded less than 20 per cent of what she was demanding in her claim. Because the judge’s award was less than what ICBC had offered before she took the case to trial, she is also responsible to pay two times ICBC’s legal costs.
Fraud – a serious offence in the courts
A Provincial Court case concluded in November 2016, where four people involved in a 2013 crash were all convicted for making false injury claims with ICBC. The fines ranged from $2,000 to $3,000 and three of the four were sentenced to one day in jail. The fourth received a sentence of three days in jail.
In this case, injury claims were presented to ICBC, even though two of the occupants who said they were in the vehicle involved in the crash, weren’t actually in the vehicle. In fact, only two people were in the vehicle along with two dogs.
Cell phone reports were used in this case indicating that those making claims were talking to each other at the time of the crash.
In his reasons for sentence, B.C. Provincial Court Judge, John Lenaghan said the case was “in many ways, a very serious offence because it is a fraud perpetrated upon everyone in the province who relies upon the Insurance Corporation.”
Who smashed up the BMW?
A 21-year-old man reported his mother’s 2010 BMW 750 had been vandalized while it was in his possession and parked at his relatives’ house in New Westminster when visiting them on the evening of October 31, 2016.
The man claimed he found the vehicle with smashed windows, dented exterior body panels, broken head and tail lights, slashed leather seats and a smashed dashboard and navigation system. The $35,000 car was a write off.
However, no one inside the house had heard any noise outside where the vehicle was parked during the two-hour period that the vandalism was said to have happened. And none of the four other expensive cars in the driveway had been damaged. And ICBC didn’t have any other reports of vandalism in the area.The vehicle owner claimed that the BMW was in excellent working condition, but an inspection at ICBC’s Centralized Estimating Facility showed an engine-warning light on the dash. The mechanical inspection later revealed the car suffered from disintegrating drive clutches in the transmission, excessive oil consumption, excessive engine and transmission oil leaks and two engine fault codes that had set off the engine warning light. Follow-up discussions with the owner resulted in information that didn’t match the mechanical inspection of the car.
Due to false statements about the condition of the car, ICBC denied the claim.
Engaged couple engage in fake pedestrian crash
While out for a leisurely walk in East Vancouver, a man said a car struck him. He claimed a variety of injuries but didn’t have any witnesses and emergency vehicles didn’t attend the scene. The man was anxious to settle his injury claim and became angry when the ICBC adjuster said ICBC needed to talk to the insured motorist. Suddenly, a woman called to report a claim and admitted to striking the pedestrian. She didn’t have the name and said she didn’t know who he was.
The man tried again to settle his claim quickly, a further review showed the man had filed three previous pedestrian knockdown claims. Again, he said he didn’t know the driver. But when the Special Investigation Unit took on the case, investigators discovered Facebook posts that revealed the two were in fact a happy couple and were engaged to be married just two weeks before the incident. The man has abandoned his claim.
Trio of staged crashes
Three crashes in Surrey close to a local auto body repair shop raised the suspicions of ICBC investigators.
In a complex web of relationships and links involving six people, it turns out one of the claimants responsible for the first crash and claiming to be injured in the third crash works at the repair shop with another man who was claiming to be injured in both the second and third crashes.
A woman claiming to be hurt in the first crash and the man responsible for crash number two were dating each other. And another woman claiming to be hurt in the first crash called another man, claiming to be injured in the second and third crashes, to drive her home after crash number one.
After an ICBC investigation, it turns out the crashes were all staged and deliberate resulting in $58,000 in vehicle damage claims and injury benefits. ICBC has denied all of the injury claims and is now pursuing legal action to recover the costs of the damage and injury benefits paid.