Insurance

How does insurance crime affect you?

At first glance, many people feel that Insurance crime has little to do with them. Unless they've personally been the victim of theft or vandalism, people tend to feel a disassociation towards the crimes committed by others. In fact, a popular sentiment is that each person is responsible for paying his or her own premiums and someone else's loss has no bearing on their own rates.

“Yeah, it happens. But I pay my monthly premium and I'm not the one abusing the system. So why should I care?”

Well, the truth is that insurance crime affects everyone.

When someone steals a car, burglarizes a home, vandalizes property or makes a false or exaggerated claim, everyone has to pay more than they should for insurance.

Give Me the Stats

The numbers are staggering. According to the Canadian Coalition Against Insurance Fraud (CCAIF), general insurance fraud costs Canadian insurers $1.3 Billion (CDN) each year. Keep in mind that this figure only covers general insurance fraud and doesn't even include the various other types of insurance fraud that exist.

In the U.S., the situation is even worse. The National Insurance Crime Bureau estimates that property and casualty insurers pay more than $30 billion a year in bogus claims.

Put another way, a full 10% to 15% of insurance premiums for home, car and business insurance go to pay for false or exaggerated claims (insurance fraud). Auto theft accounts for an additional $43 of the average auto insurance premium.