If you really pay attention to the cost of your home and car insurance continuing to increase from year to year, one big factor is most likely fraud.
You may be surprised to learn that each year insurance fraud costs Canadians $1 billion. At least 15% of what you currently spend on insurance in this country goes to cover fraudulent insurance claims. It also means that if you do everything with a guide, you are still paying dearly for the task of tricking other people.
This time, including that we are all still immersed in the throes of the COVID-19 pandemic, which has left many people scrambling to face the unknown working circumstances and feeling the pressure of financial hardship and uncertainty. All of these factors make us much more vulnerable.
Fraud and Financial Deterioration Side by Side
Traditionally, there have been frequent spikes in fraud duty in times of financial hardship and natural disasters – both of which we are seeing with this pandemic. Fraudsters usually jump at every opportunity to take advantage of fear and uncertainty and are now starting to exploit this dilemma for their monetary gain.
What makes the COVID-19 pandemic different from previous dilemmas is that it spreads to all insurance lines, from homes, cars and industry. We all have a hard time adjusting to a new reality. Unfortunately, distractions including those we experience can reduce our vigilance and open the door for fraudsters to take advantage. Research also shows a constant relationship between unemployment and an increase in property crimes, as individuals from work become more determined to find ways to find satisfaction.
Would You Admit to Fraud If You Mastered It?
So how do you avoid dropping sufferers into insurance fraud? Perhaps the best way to protect yourself is to know how to spot a scam. Learning how to recognize the red flags of fraud can save you time, money and a lot of hassle.
Insurance fraud can occur in many ways, but the main type the average individual should look for is through the relatively normal duties of their car and home. Let’s take a look at some of the common methods by which fraud can happen right under our noses. Fraud usually comes in several forms:
- Opportunistic. When there is a genuine claim, but the damage is overemphasized, or the value of the warehouse or damaged goods is increased to increase the payout. Individuals may see an opportunity to “put a silver cellular layer” on their misfortune, or have someone else, (such as their auto technician, for example) motivate them to do so.
- Aware. This type involves people devising and actively planning ways to defraud, intentionally damage property or vehicles, fake work that needs to be done on your home or vehicle or make claims on property that was never taken or tampered with in the first place. These scammers can hide within the supply industry, through body repair shops or contractors renovating your home. Be careful with blank forms. If someone wants you to sign an insurance claim form and say they’ll “fill in the rest later,” don’t do it!
General Car Insurance Fraud Situation
- Damage to pre-existing vehicles included in the car insurance claim
- Additional damage done to the vehicle after an accident occurs to increase repair costs (this can be done by a provider, such as an auto technician or also a tow truck driver, without the knowledge of the car owner)
- Providers benefiting from COVID-19 to charge vehicle “extra cleaning” (where no additional solution is provided)
- Misrepresenting the problem, fuel mileage, or installed element values of the retrieved car, or falsifying or resetting the in-car evaluation
- Making insurance claims for vehicles or property that are not taken or damaged
- Fraudsters intentionally trigger car crashes with unwary drivers or host accidents with various other conspirators
- Designing ways to avoid paying insurance costs, which consist of coverage of living at one address while staying at another address, misinterpreting the main driver, not covering using the vehicle for business purposes, and so on.
Renovating Your Home? Don’t Pay Upfront!
Many thanks, in part, to the appeal of the DIY show, today’s home renovation is an industry. And with any industry, there is a greater potential for fraud. According to the Canadian Home Builders’ Organization, some tips for preventing fraud include:
- Get everything in writing
- Hire professional contractors and check their recommendations, and their insurance coverage
- Do not pay cash and do not pay in advance
- Keep an eye on additional jobs that are not included in the starting range and price
- Ensure certain required permissions are obtained
- Be careful with too many “unexpected problems” happening
A Word About Identification Theft
With so many people working from home, cyber attacks like phishing and various other internet hacking strategies to collect your personal information have increased. Individuals often do not have the same level of security as they do in the workplace. There is a greater chance for fraudsters to steal your identification and credit information and use it to commit fraud. Other ways can be much more low-tech, such as credit card invoices taken from your reuse bin.
Here are ways to protect yourself in your home while out:
- Secure documents (such as tickets and financial information) in your home or in a protected off-site location, such as a safe
- Destroy personal documents before reuse
- Avoid opening dubious emails and accessories
- Install security software such as anti-virus software and firewall
- Never give out individual information to someone calling you claiming to be from the federal government or a credit card company
- Protect your PIN when using ATM or debit machines
Your vehicle can also be a conduit for identity thefts. For example, if your car comes in and the acknowledgment documents from your glovebox are taken, or if a fraudster is snooping around. your confession through the windows of the house.
Here’s how you can secure your car:
- When parked, roll up the house windows, fasten the doors and keep the keys with you
- Keep registration and proof of insurance with you forever (not in glovebox)
- Never leave envelopes or packages with decisive information such as your real address visible – put them in the trunk
- Try to keep parking in a well-lit location
- Understand the individual or vehicle in question, and record it with the authorities if necessary
- Finally, (and this may be difficult for many), know where all your car key sets are forever
Keep Recording Thoughts of Fraudulent Actions
If you suggest that you may be a fraud sufferer, make a note of it immediately with your local authority, the Criminal Crime Stopper, the Canadian Bureau of Insurance or the Canadian Anti-Fraud Center.