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The Royal Bank of Canada branch in Old Montreal Thursday, Feb. 26, 2009.

Ryan Remiorz

Without police action, legislative changes, and new safeguards such as the accreditation of medical clinics, insurance fraud will continue to grow and jack up the cost of policies, say executives from RBC Insurance.

The company took the unusual step of holding a press conference Wednesday to outline current scams, and to put pressure on policy-makers to do more to address the problem.

For instance, executives said they are aware of tow truck drivers in the Greater Toronto Area who receive $3,000 to refer someone who has been in a car accident to clinics or rehabilitation centres. Those centres will proceed to milk the system by having the victim undergo a battery of unnecessary medical assessments - or worse yet, will charge the insurer for assessments that were never performed on the victim.

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RBC insurance described one case where it received minor injury claims from one accident - in which three people were in the car - for 76 different treatments involving 50 different assessors, executives said.

The company is receiving claims for things such as driving assessments, sleep study assessments, biopsychosocial assessments, job site analyses, financial assessments (which look at whether the person has become unable to manage his or her finances because of the whiplash or other injury suffered in the accident), nutritional assessments, neuropsychological assessments, orthopedic assessments, and podiatrist appointments. In each instance, an assessment fee is paid to the clinic or practitioner.

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"We suspect that sometimes clients aren't [even]always attending all of these," said Ken Bowman, RBC Insurance's head of life, health and casualty claims.

"We've gone back to our customers and said, 'Did you actually have this appointment?' and they've said no," added Catherine Honor, president of RBC Insurance.

They say a small but growing industry has developed in Ontario in recent years to take advantage of generous auto insurance benefits. The province has mandated that drivers carry coverage for at least $100,000 of medical rehabilitation benefits for any injury, no matter how minor. That will drop to $50,000 with a series of reforms that the Ontario government is ushering in in September, but RBC Insurance says those changes - while helpful - won't do enough to prevent fraud. And executives fear that the perpetrators will find new ways to milk the system.

"The current legislation has really been targetted by a small number of stakeholders in the assessment and treatment community to capture a large number of the injured drivers and passengers in the Greater Toronto Area," Mr. Bowman said.

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"In Canada, there's no legislation to prosecute against insurance fraud," Ms. Honor said.

The average cost of a minor injury claim in Ontario last year was $53,000, compared to $3,689 in Alberta, $5,904 in Nova Scotia and $8,400 in P.E.I. Insurers who operate in Ontario are paying out more in accident benefits than they are taking in premiums.

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