Ontario is currently in a hard insurance market meaning that car insurance rates in Ontario are at their highest. One of the reasons Ontario is in a hard market is because of car insurance fraud. People who commit car insurance fraud try to game the system with false underwriting information, false or staged claims and inflated payouts. Additionally, the Insurance Institute of Canada says that car insurance scams are becoming more prevalent and is a multi-billion dollar problem that drivers should be aware of.

Here are four common types of car insurance fraud:


How it works? This scam occurs when people:

  • Sell their cars overseas and declare it stolen so that their insurance company will pay for it.
  • Strip their car and sell it for parts, deem it stolen and request that their insurance company pays.
  • Vehicle dump. This happens when people leave their car in very remote locations and claim it was stolen.


As an example, let’s say you were in a fender bender with minor damages to your car and the estimated costs of repairs are looking to be $2,500. How this scam works is that you submit a claim to your insurance company for damages and either never repair the car or inflate the cost of damages so you can walk away with a larger payout.


Staged insurance scams are one of the most common types of car insurance fraud. Some common scenarios include:

  • Rear end collision/start and stop collisions
  • Sideswiping
  • Wave and hit. This happens when you’re trying to merge into traffic. The dishonest driver will pretend to wave you forward and then crashes into your car.
  • T-bone accident scams


Say you get into an accident and the other driver reports pain. In no way should you assume from the start that their claims are false/inflated, but these types of injuries are often very difficult to detect from the naked eye. However, to mitigate the risk of being a victim of a fake injury claim, it’s best to file a police report. Above all, if the car insurance scam artist is inflating injury but the police report shows very little to no damage to the car, the insurance company will cross compare the claim vs the police report to determine a fair payout.


Unfortunately we all pay for car insurance fraud. Some consequences include:

  • Increased car insurance rates. Approximately 15 per cent of your annual premiums go towards paying for insurance fraud and scams.
  • Out of pocket costs: you could be responsible for paying for damages, although the accident wasn’t your fault.
  • Inconvenience. Being a victim of a car accident scams cost you time and money.

Tips for avoiding car insurance scams?

  • If  you were in an accident report it. Call 911 and if possible take photos of the scene and damage to the vehicle. In the same vein, remember to also collect the other driver’s information (i.e. plate numbers, insurance information, driver’s license, how many people were in the car).
  • Use trust worthy professionals. Go to body shops, medical or legal professional that you know.
  • Keep track of your records. Double-check all bills and statements to ensure that they’re accurate and only include the services or treatments you actually received.

In conclusion, at isure, we take car insurance fraud seriously. If you suspect that you’ve been a victim of fraud, contact us if you think anything is suspicious. Furthermore, you can call the Insurance Bureau of Canada at 1-877-IBC-TIPS and provide details of the incident. You’ll be protecting yourself and may save someone else from becoming a victim.

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