Address misrepresentation a ‘growing problem’: Aviva Canada exec
July 30, 2021 by Canadian Underwriter Staff
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Aviva Canada is reporting a spike in insurance claims that involve misrepresented addresses, leading one executive to call for greater awareness around the issue.
According to chief claims officer Bryant Vernon, Aviva Canada data shows a 9.1% increase in Ontario and almost 7% increase in national address misrepresentation claims, when comparing pre-COVID times (April 2019-March 2020) to the past year (April 2020-March 2021). “And those are just the cases we know about,” Vernon said.
Address misrepresentation involves people providing insurers with the wrong home address in order to obtain cheaper rates on insurance. It also applies to auto insurance.
The increase comes amidst what Vernon calls “move mania”, with Aviva Canada’s How We Live Report showing one in three Canadians are considering moving due to the pandemic. “To call Canada’s recent real estate market ‘feverish’ seems like an understatement. It’s intense, with many people on the move due to the freedom of remote work … Moving companies are booked solid. Competition for new real estate listings is fierce, on both the rental and for sale sides,” Vernon wrote in a recent blog post.
It’s not only home insurance that’s affected.
The Ontario-based credit reporting agency TransUnion recently said that auto insurance rate evasion, in particular misrepresented address information, is a growing problem in the Canadian auto insurance industry, Vernon added.
Brokers should remind clients to update addresses after moving and explain the consequences of address misrepresentation, even when it occurs by accident. Customers could be left completely uninsured or accused of insurance fraud. According to the Financial Services Regulatory Authority (FSRA), consumers who misrepresent their address could have coverage invalidated, an insurance policy cancelled, future premiums increase, or be denied future insurance altogether.
“Insurance fraud costs us all,” Vernon said. “An estimated $2 billion in annual insurance fraud costs in Canada ultimately get passed along to honest, mostly claims-free drivers in the form of higher premiums.”
Vernon said Aviva’s annual surveys of Canadian consumers has shown most people “see the direct relationship between insurance claims costs and the annual premiums they pay”.
In response, the Aviva Hub online reporting tool allows Canadians, whether they are Aviva customers or not, to report if they think they’ve unintentionally become a victim of insurance fraud.
Feature image via iStock.com/LifestyleVisuals
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If you’re an insurance company and contemplating invoking a breach in an auto policy for address misrepresentation, I would strongly suggest you look at the wording under item 1 of the application; “Applicant’s Name and Primary Address (“Primary Address” means address where applicant normally resides).” The dictionary gives “normally” the meaning of ‘usual, in a normal manner,’ but not absolute. But more importantly, as “Primary” is used, then its antonym is ‘secondary, subsequent, later.’ In this sense, secondary could possibly mean another place of residence.
You may want to give some serious thought to the current use of the term “primary” if the intention is to go after an apparent miscreant.
Frank, I think you are missing the point.
This isn’t about someone who lives both at the cottage and in the GTA. This issue is about misrepresentation.
If you work in the insurance industry, you know what is going on.
On re-reading the article, I believe you are correct.
Thanks for bringing this to my attention.
Frank