With auto insurance premiums on the rise in Ontario (see here) cases like Jacinta Kanakaratnam’s (see here) pose an interesting perspective on the issue. In the fight against insurance fraud, how far is too far? Insurance fraud is no-doubt a major contributor to the increasing cost of insurance and it affects us all. According to Insurance-Canada (see here) 26% of personal injury claims contained some element of fraud whether it be opportunistic or premeditated. The misuse of the insurance system results in higher costs to the insurance companies which in turn must raise their premiums to make up for it. In Jacinta’s case she was required to provide a copy of her car’s ownership and a utility bill to prove the information she provided was true. She was also required to pull motor vehicle records for every licensed driver in her household and deliver them to an office that was in Scarborough, about 50 kilometres away from where she lived. This was part of a broader initiative to combat insurance fraud by her insurance company. In this case she was inconvenienced and felt that she was not properly informed by her insurer as to why this information was requested of her.
On one side, it is necessary to take steps in reducing the frequency and impact of insurance fraud. However on the other side the customer faces a negative experience and is unlikely to continue business with that insurance company. Where is the balance? What is the best way to lower insurance fraud while maintaining customer satisfaction? The answer may lie in customer service.
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