how do organized fraudsters do it?

auto insurance fraud


costs as much as $1.6 billion in Ontario every year, according to a study by KPMG


leads to higher premiums for all drivers


organized fraud rings reduce road safety and endanger innocent drivers by staging collisions to fraudulently collect claims money


organized fraud rings include numerous participants, are sophisticated, and target
multiple insurers

It starts with a recruiter, often a paralegal, who knows the ins and outs of the auto insurance system and how to abuse it.



The recruiter signs up 3 or 4 participants – people who will sit in a vehicle, stage a collision and play the role of “accident victims”.



The participants stage a collision, sometimes with another car full of people who are in on the scam, sometimes with an innocent driver who had nothing to do with it.



A tow truck driver, also part of the scam, is already on the scene.




The vehicle is taken to a “chosen” body shop where they may do additional damage and then bill for fraudulent repairs.




Meanwhile, the recruiter directs the participants to a rehab facility for “treatment”. The participants pretend to be more injured than they are, typically with soft tissue injuries like whiplash.



The recruiter/paralegal submits claims to insurers. The bills can be hundreds of thousands of dollars for bogus treatment, lost income, housekeeping and other accident benefits.



Everyone gets their cut of the money, and the recruiter gets kickbacks from the rehab facility, body shop and tow truck driver.


claim costs go up. premiums go up. everyone pays more.

facts and stats

Concepts and content courtesy of Insurance Bureau of Canada.

CANATICS – Organized Auto Insurance Fraud Explained

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