Canadian Underwriter

If a car is parked in the forest, is it fraud?

March 20, 2018   by Jason Contant

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Out of sight, out of mind? That expression could be used to describe a recent Manitoba Public Insurance (MPI) fraud case in which a hunter, deep in the backwoods of the Interlake, was amazed to come across a car in the middle of the isolated bush.

It was apparent the vehicle had been deliberately parked to be out sight, MPI said in a press release on Friday. Five days earlier, the vehicle’s owner reported that his locked vehicle had been stolen.

The subsequent investigation found that the ignition had not been defeated, the vehicle’s immobilizer (a device that prevents the engine from running unless the correct key is present) had not been compromised, and there were no visible signs of forced entry. There was also only one key to the vehicle which was in the owner’s possession. An estimator examined the vehicle and determined it was in very poor condition overall and would not pass a safety inspection, MPI reported.

“It was quickly determined that the vehicle could not have been driven without a programmed transponder key,” the release said. “With this information in hand, Manitoba Public Insurance denied coverage due to the owner providing a false statement.”

MPI highlighted the incident among its top fraud cases during Fraud Prevention Month, an annual campaign held in March that aims to prevent Canadians from becoming victims of fraud.

In another case, a claimant who was originally injured in a motorcycle crash alleged he was in such extreme pain he could only stand for a few minutes at a time. He was even physically incapable of carrying a small bag of trash to the garbage bin. “It’s a tale of woe that continued for months,” MPI said.

The insurer’s Special Investigation Unit (SIU) was asked to take a closer look. Investigators observed the man walking for long periods of time without the use of mobility aids, operating a piece of machinery and easily pushing a fully loaded wheelbarrow. Contrary to what he had told his case manager, he was also observed driving a vehicle. After all the evidence was gathered, the man’s bodily injury claim was subsequently reviewed and terminated.

Another fraud case involved a woman in her late 20s who said she was injured in an auto collision. She told her case manager she was struggling to take care of herself and her child, requesting income replacement payments and home care assistance. Due to discrepancies in her documentation, suspicions soon arose and the file was forwarded to the SIU.

The woman’s tall tale quickly unraveled when an investigator spoke to the driver and passenger in the other vehicle involved in the collision. They reported exchanging particulars with an older man, who was accompanied by an elderly woman. Both eyewitnesses also confirmed the younger woman was not at the scene of the crash after they were shown a picture of her.

The investigation conclusively proved the woman was not involved in the collision or entitled to benefits. Due to false information provided, her was terminated.

MPI reports the claims savings from uncovering these frauds estimated at nearly $50,000.

Insurance fraud – auto, home or healthcare – costs Canadians more than $3 billion a year in premiums, according to the Insurance Bureau of Canada.

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2 Comments » for If a car is parked in the forest, is it fraud?
  1. Scott says:

    The question of how to reduce the cost of auto insurance is in this weeks issue. This article though shows the answer that is so obvious. Each blatant fraud case cannot be reported on and have each resolution end with “as a result of the investigation benefits were terminated”. There has to be fines, prison sentences & costs assessed…Just to close your file, eat your expenses and high-five your fraud team provides zero deterrence to the individual(s) involved and sends no warning to the next person contemplating a fraud.

  2. Dans says:

    Part of the problem is that the system is depersonalized, and the underwriters/brokers never see or become familiar with their clients. This lends itself to fraudulent behaviour, as clients then take advantage of that depersonalization….while data analysis is helpful, it would be much better to actually know who you are covering…but that may not be possible in the present state of affairs, and will only get worse in the future….unless one starts assaulting clients rights to privacy….so think of ways to inhibit fraud beyond the traditional.

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