Canadian Underwriter

New discount proposed for claimants who use insurers’ accredited body shops

March 13, 2018   by Greg Meckbach, Associate Editor

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In the wake of an undercover investigation that allegedly caught collision repair centres deliberately damaging vehicles, Aviva Canada is pushing for discounts for vehicle owners who agree to use an insurer’s accredited body shop.

Such a discount would require a regulatory change. Currently, an Ontario auto insurer “cannot give a discount in exchange for pre-agreement to go to an accredited body shop,” Gordon Rasbach, vice president of fraud management at Aviva Canada, said Monday in an interview.

Ontario auto insurers must file rates for approval from the Financial Services Commission of Ontario, which has a narrow list of factors that insurers may use to give motorists discounts. For example, insurers may base rates on distance driven, postal code, age, sex and marital status. FSCO prohibits insurers from using many factors, such whether the vehicle was involved in a minor at-fault accident and the policyholder’s credit score (which some insurers say is a good predictor of claims severity).

Aviva said Monday the Ontario government should allow insurers to give discounts to customers who agree to use an insurer’s accredited repair network. Rasbach said Monday he first heard of the idea  in a private conversation he had with a broker.

The call for the discount comes after the results of an investigation in which Aviva placed damaged cars equipped with hidden cameras at random locations in the Toronto area to simulate collisions. All 10 cars were taken in for repair. In nine cases, fraudulent invoices were submitted, Aviva announced.

The investigation Aviva announced this week was a year-long secret operation. Experts hired by Aviva deliberately crashed and caused minor damage to those cars. The drivers were actually Aviva undercover investigators posing as hapless motorists waiting for assistance.

“We were going to go longer with the investigation and stopped it,” Rasbach said. “It just got to a point where every car was coming back with fraud.”

Some auto body shops billed for new car parts, but either installed used parts or did not replace the parts at all. Some parts that were not damaged were itemized on the final invoice as having been repaired.

The one car that did come back without fraud just happened to have been sent to an Aviva preferred garage, Rasbach said.


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4 Comments » for New discount proposed for claimants who use insurers’ accredited body shops
  1. Frank Cain says:

    Aviva says “auto body shops”. Were any of these shops connected with a dealership? Unless a vehicle has gone beyond the warranty period, owners would be smart to take their damaged vehicles to the dealer from which it was purchased to have repairs made to avoid any controversy over warranty issues that could otherwise arise regardless of whether an ‘auto body shop’ is legitimate or otherwise. How does an insurer know if a preferred shop continues to operate as such when the temptation could always be there to be otherwise. Does it conduct test cases now and again?

    Your hands are full if you think insurance fraud can be reduced. Staged accidents, minor injuries exaggerated and mostly unprovable by health services, non-existent personal items lost or stolen, partially damaged items deliberately destroyed, personal items appraised way beyond their value for insurance that will never meet actual replacement cost (causing the insurer excessive cost in time and trouble to sort out with a disenchanted policyholder).

    • Shane says:

      Most dealerships nowadays do not have a collision centre on site. Either because they don’t have the space or capital. These same dealerships work with the body shops you mentioned.

  2. Peter says:

    Maybe insureds should Google every insurance company, read all the poor reviews and see how wise that would be to let your insurance company have all that control over your vehicle. The nightmare stories far outweigh the positive reviews.

  3. Nick says:

    What this article fails to explain is that the insurance companies are falsely baiting us with lower premiums. Their end game is take control of the repair process in order to control their costs by using inferior aftermarket and used parts. Higher profits by limiting our choices. Other legislation has passed and has only resulted in our choices being limited with no real reduction in premiums.

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