TORONTO, Oct. 17 /CNW/ – The property and casualty insurance industry paid an estimated $500 million last year for personal injury insurance claims that contained some form of fraud, according to a study released today by the Canadian Coalition Against Insurance Fraud (CCAIF). Canadians submit a personal injury claim when they have been injured in their automobiles or their homes.
Insurance fraud seems on the surface like a crime that doesn’t really hurt anyone. A few extra dollars squeezed out of an insurance company doesn’t seem like it would make much of an impact on a large and successful company. Unfortunately, when those extra dollars are taken illegally many times over, the financial impact on insurance companies becomes a very large one indeed. The Insurance Bureau of Canada estimates the yearly cost of insurance crimes to be in the billions.
The loss to insurance companies due to fraud results in the need to raise insurance rates across the board. That means that the more fraud that occurs, the more everyone winds up paying for his or her insurance policies. The cost to the insurance company is passed on to the insured, even though they likely had nothing to do with the crime.
Insurance fraud from inflated claims, false injury and damage claims, and of course large insurance crime rings adds up quickly to an amount of money that insurance companies can’t simply absorb. Instead, everyone pays the price.