An insurer north of the border has investigated a string of fraud cases regarding deliberately damaged cars.
A Canadian car insurance company recently held an investigation into auto body shops within the country’s largest city. Aviva Canada determined that a tremendous number of auto repair businesses are involved in scamming the insurer.
The insurer determined that auto body shop workers were billing for unnecessary work or work not done.
The Aviva car insurance company determined that half of the total expenses it received for crashed vehicle repairs were fraudulent. The insurer estimates that it has been defrauded by hundreds of millions of dollars each year.
The mechanics were billing for reasons such as deliberately damaged vehicles. Furthermore, they billed the insurance company for new parts when they had installed used ones into the vehicles. Moreover, they were even found to have been billing for phantom repairs.
The car insurance company is now seeking assistance from the government of the province of Ontario.
Aviva wants the provincial government to support auto insurance companies in overcoming this problem.
“Nobody has ever really sampled the extent of fraud with any kind of accuracy,” said Aviva vice president of fraud management, Gordon Rasbach. “This is the first time in Canada that we’re aware of that anyone has actually taken a sample, albeit a small one, at random, and used actual cases in progress to put some kind of numbers on it.”
Aviva conducted an investigation that simulated a standard fender bender situation. The simulations involved private cars. They did this by deliberately crashing ten different cars. Once the cars were crashed, Aviva hired experts to create a record of all the damage details. This report included an estimate of what the repairs should cost.
Those vehicles were then outfitted with a number of hidden cameras. At different times throughout 2017, investigators posing as the vehicles’ drivers placed the cars on Toronto area highways. The investigators pretended they had just experienced their first accident.
Of all the body shops that saw the vehicles, only one gave an honest response, said Rasbach. The other nine vehicles were seen by mechanics that showed some level of “clear cut” fraud, he added. Aviva’s experts had estimated the cost of the damage repairs for the 10 vehicles to be a total of $30,000. However, the total Aviva received from the repair shops was about $61,000, said the car insurance company.