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Insurance Fraud

Exaggerating the losses in an insurance claim or claiming a loss on something that was never owned can be considered insurance fraud. Insurance fraud is a crime and people who commit insurance fraud can be charged.

How it works

  • After losing a wedding ring, a claim is made that exaggerates the size and value of the diamond. 
  • A friend or acquaintance is hired to steal a high-priced item in a home and sells the item for profit. The profit is shared between the friend and the claimant, and an insurance claim is filed to collect additional payment for that item. 
  • A fire destroys a home and claims are made for items that were never owned.
  • The power is disrupted in a home, resulting in damages to the home and spoiled food in the fridge and freezer. Several pounds of lobster are fraudulently listed as foods that were spoiled. 

Vendor Fraud

Insurance fraud can also take place by contractors hired to fix a damaged home or to replace a valuable item. Insurance fraud by contractors is known as restoration fraud. Always ask for a written contract when seeking restoration services, hire professional contractors, and provide a paper trail when you pay for services or replacement products related to insurance claims.

Ways to Help Prevent Insurance Fraud

Losing personal items and making a claim can be stressful, and some people may have a hard time recalling details on lost items. Here are ways to help prevent insurance fraud:

  • Take a video of items in your house and any high value items each year. Store this video in a place outside of your home. This is a good way to reduce stress and provide accurate information to insurance adjusters when making a claim. 
  • Be honest with your insurance adjuster when discussing details of a claim. Do not inflate the value of items or exaggerate the amount of goods claimed. 
  • Keep appraisals and receipts of high value items in a fireproof safety box. 

Insurance fraud impacts everyone. Not only can those who file a fraudulent claim face criminal charges, but it can result in insurance companies increasing premiums due to increased claims. Fraudulent claims may result in the loss of insurance and cause difficulty in obtaining future insurance.

How to report it

If you suspect you’re a victim of insurance fraud or attempted insurance fraud, contact your local police or RCMP, the Canadian Anti-Fraud Centre, and complete the FCNB Submit a Complaint form.

If you are seeking general information on insurance issues, assistance in finding insurance or advice on dealing with a claim, contact the Consumer Advocate for Insurance.