It never fails to amaze me how decent, law-abiding citizens become
tempted to submit bogus damage claims when they believe an insurance company
is going to pay the tab. According to the Insurance Bureau of Canada,
insurance fraud is one of the most expensive white-collar crimes in Canada,
with an estimated cost of more than $1.3 billion annually.
The insurance industry estimates that 10 to 15 per cent of home, car or
business insurance claims are fraudulent. Ultimately, we all pay for the
fictitious claims, through higher insurance rates and inflated prices for
consumer goods and services.
The Canadian Coalition Against Insurance Fraud (CCAIF) was established by
industry stakeholders in 1994 to prevent and detect insurance frauds. Every
year it publishes a list of the top 10 insurance frauds, featuring some of the
most offbeat and oddball schemes of the previous 12 months.
Here are some of my favourites culled from the CCAIF list of homeowner frauds
in the last few years. All the stories are true, but the names are omitted to
protect the dimwitted:
THE LONGEST YARD: An adjuster interviewed a man at his house on a
routine stolen boat claim. The insured said his 21-foot vessel was stolen from
his locked garage. It didn't take a high-tech tool to discover this fraud
just a measuring tape: The garage was only 18 feet long.
PHOTO FINISH: A flood in a man's basement caused extensive water
damage. The insurance adjuster arrived on the scene and took pictures for his
files. The photos showed a TV set, stereo and a few bags of clothing that
would all have to be replaced. A contractor who arrived the next day also took
pictures, but his told a different story. They showed three TV sets, two
stereos and 40 bags of clothing. The claim was denied.
COPYCAT: A man moving into his new house dropped his television set and
it tumbled down the basement stairs. The insurance company replaced the set
with a new one. The insured bragged to a co-worker about the prompt and
efficient service he received from his insurer. She told her husband who soon
afterward called his own insurance company to report that he had dropped his
set and taken it to the dump. Unfortunately for him, the same insurance
adjuster handled both claims. He went to the dump and discovered that the
make, model and serial number of the TV set in the second case were the same
as in the earlier case.
ONE FOOT TOO LONG: A man's foot had been injured. His story was that as
he was getting out of his car, a family member ran over the foot with a
lawnmower. When an investigator showed up, he noticed that the driveway was
substantially higher than the adjacent lawn, and that the man's story could
not have been true unless his leg was 10 feet long. The claim was withdrawn
and the insurance company never found out what really caused the injury.
BOGUS IN BOTH LANGUAGES: A beautiful piece of sculpture was stolen in a
home break-in. Its owner filed two claims for the theft of the same sculpture
one in English and one in French. Fortunately the claims adjuster was
bilingual and spotted the scam.
SLIPPERY CHARACTERS: A man and woman were standing on the front steps
of a house and bidding their hosts goodnight. Freezing rain had been falling
during the evening, and the woman slipped and tumbled down the stairs. The
party hosts were sued for damages under their home insurance policy. An
investigator later discovered that witnesses to the slip-and-fall incident
said they saw the man glare at his wife and tell her to act as if she was
really hurt. Another heard him whisper, "Who knows, maybe we can make a few
bucks from the insurance company." The company's response was as icy as the
COMING CLEAN: A man said he was standing in his bathtub taking a shower
when suddenly his whole house shook. He slipped and suffered a nasty injury.
Apparently a passing motorist had lost control of his truck and slammed into
the house. The local paper had carried a story about the accident. It quoted
an eyewitness who was standing outside the house at the time and saw the whole
thing. Unfortunately for the claimant, the eyewitness was the same guy who
filed the claim.
THE INSURED HAD NO CLOTHES: A man said his clothesline was stolen from the
backyard and with it all his clothes. The insurer paid up. That story inspired
the man's friend, who also claimed his clothesline was stolen along with lots
of expensive clothes. Before they got taken to the cleaners, the insurance
company discovered that the man lived in a 12th floor apartment with no
balcony. Claim denied.
A HUSBAND'S TEMPTATION: The adjuster was running down a list of standard
questions with a couple that had been involved in a car accident. The adjuster
asked the wife if she had been injured and she said no. Asked if he had been
injured, the husband hummed and hawed for a moment. Then the wife jumped in.
"He's thinking about it," she said. The adjuster is thinking about it, too.
If you're thinking about a good tale for your insurance company, think again.
They've heard it all before and they're experts at scoping out bogus claims.
Bob Aaron is a Toronto real estate lawyer. He can be reached by e-mail at firstname.lastname@example.org,
phone 416-364-9366 or fax 416-364-3818. Visit http://www.aaron.ca