Bilked by auto insurers?
Always crying poor, it’s time for car insurance companies to open their books
You’ve got to hand it to the insurance industry’s public relations efforts. Here we are, eight weeks until the Ontario provincial election and there’s hardly a peep about insurance as an election issue. Nobody seems concerned about the drastic reduction in no-fault car insurance benefits implemented last September. Reimbursement for medical and rehabilitation services for minor injuries was drastically reduced — from $100,000 to $50K for non-minor non-catastrophic injuries and to $3,500 for minor injuries. While catastrophic injury victims are entitled to $1 million in benefits, efforts are underway to modify the definition of catastrophic injury so fewer catastrophically injured people will qualify for the enhanced benefits. (All figures represent maximum reimbursement for expenses deemed necessary and reasonable.)
Instead, there’s an abundance of publicity concerning insurance fraud. The McGuinty government has announced an Auto Insurance Anti-Fraud Task Force. Tim Hudak has vowed to crack down on auto insurance fraud, if elected. Newspapers, television and radio broadcasters have reported on the problem. I keep reading and hearing how fraud costs insurers about $1.3 billion annually. The Toronto Star proclaimed in a headline “Shady clinics bilk $1.3 billion in bogus car insurance claims scam.” I didn’t notice any clarification from the insurance industry. The Globe and Mail referred to industry sources who claim fraud is growing and costs the industry “more than $1.3 billion” each year.
Strange, since the same $1.3 billion number has been repeated for almost 20 years according to one report. According to the Insurance Bureau of Canada site, fraud costs insurers “about $542 million annually.” The same site says “an estimated $500 million is paid out by home, car and business insurers for claims containing elements of fraud.” From all this, the only thing I can conclude is yes, there’s fraud, as there is whenever money is at stake, but we don’t have a handle on a reasonable estimate. We may as well be picking numbers out of the air.
Of course there’s insurance fraud and we need to address it. There are obvious steps to take, starting with requiring all clinics to be owned by a licensed regulated health care professional. But, at the same time shouldn’t we also be looking at the insurance industry? How often have insurers denied legitimate claims or benefits? The Financial Services Commission of Ontario (the body that regulates insurance in Ontario) provides an arbitration service for insurer/insured disputes. A review of the arbitration unit decisions is replete with examples of improper denials. Unqualified experts How often do insurers retain unqualified experts to provide pro-insurer evidence to fight valid claims? Again a review of FSCO arbitration decisions presents an unflattering view of insurers. Let’s have insurance companies open their books.
How much are they spending on fraud prevention? How much money are they making (or losing) on car insurance? Are they spending too much on lawyers defending meritorious claims? Are adjusters taking too much money out of the system with unnecessary action? How much money goes to doctors with a perceived pro-insurer bias performing what are supposed to be independent medical examinations of accident victims?
The Insurance Corporation of British Columbia publishes an annual list of expenditures. The 2010 list names 19 physicians who were paid a total of $4.7 million or an average of about $250K each. I’m sure most of these doctors are fine people who do their best to present unbiased independent medical reports, but really how independent can anybody be if he earns such large sums from an insurance company?
So sure, let’s do our best to eliminate fraud, but at the same time let’s not take our eye off the ball. Insurance is supposed to be there for deserving policyholders. We need to examine insurance industry practices to ensure policyholders are getting fair treatment.
The state of the insurance industry isn’t an election issue. It should be.
source: Alan Shanoff, torontosun.com
Always crying poor, it’s time for car insurance companies to open their books
You’ve got to hand it to the insurance industry’s public relations efforts. Here we are, eight weeks until the Ontario provincial election and there’s hardly a peep about insurance as an election issue. Nobody seems concerned about the drastic reduction in no-fault car insurance benefits implemented last September. Reimbursement for medical and rehabilitation services for minor injuries was drastically reduced — from $100,000 to $50K for non-minor non-catastrophic injuries and to $3,500 for minor injuries. While catastrophic injury victims are entitled to $1 million in benefits, efforts are underway to modify the definition of catastrophic injury so fewer catastrophically injured people will qualify for the enhanced benefits. (All figures represent maximum reimbursement for expenses deemed necessary and reasonable.)
Instead, there’s an abundance of publicity concerning insurance fraud. The McGuinty government has announced an Auto Insurance Anti-Fraud Task Force. Tim Hudak has vowed to crack down on auto insurance fraud, if elected. Newspapers, television and radio broadcasters have reported on the problem. I keep reading and hearing how fraud costs insurers about $1.3 billion annually. The Toronto Star proclaimed in a headline “Shady clinics bilk $1.3 billion in bogus car insurance claims scam.” I didn’t notice any clarification from the insurance industry. The Globe and Mail referred to industry sources who claim fraud is growing and costs the industry “more than $1.3 billion” each year.
Strange, since the same $1.3 billion number has been repeated for almost 20 years according to one report. According to the Insurance Bureau of Canada site, fraud costs insurers “about $542 million annually.” The same site says “an estimated $500 million is paid out by home, car and business insurers for claims containing elements of fraud.” From all this, the only thing I can conclude is yes, there’s fraud, as there is whenever money is at stake, but we don’t have a handle on a reasonable estimate. We may as well be picking numbers out of the air.
Of course there’s insurance fraud and we need to address it. There are obvious steps to take, starting with requiring all clinics to be owned by a licensed regulated health care professional. But, at the same time shouldn’t we also be looking at the insurance industry? How often have insurers denied legitimate claims or benefits? The Financial Services Commission of Ontario (the body that regulates insurance in Ontario) provides an arbitration service for insurer/insured disputes. A review of the arbitration unit decisions is replete with examples of improper denials. Unqualified experts How often do insurers retain unqualified experts to provide pro-insurer evidence to fight valid claims? Again a review of FSCO arbitration decisions presents an unflattering view of insurers. Let’s have insurance companies open their books.
How much are they spending on fraud prevention? How much money are they making (or losing) on car insurance? Are they spending too much on lawyers defending meritorious claims? Are adjusters taking too much money out of the system with unnecessary action? How much money goes to doctors with a perceived pro-insurer bias performing what are supposed to be independent medical examinations of accident victims?
The Insurance Corporation of British Columbia publishes an annual list of expenditures. The 2010 list names 19 physicians who were paid a total of $4.7 million or an average of about $250K each. I’m sure most of these doctors are fine people who do their best to present unbiased independent medical reports, but really how independent can anybody be if he earns such large sums from an insurance company?
So sure, let’s do our best to eliminate fraud, but at the same time let’s not take our eye off the ball. Insurance is supposed to be there for deserving policyholders. We need to examine insurance industry practices to ensure policyholders are getting fair treatment.
The state of the insurance industry isn’t an election issue. It should be.
source: Alan Shanoff, torontosun.com
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