When everyone’s a fraudster: why ICBC would rather not pay you

The Insurance Corporation of British Columbia is utterly convinced that up to 20% of insurance claims contain an element of fraud or exaggeration. They actually believe that up to $600 million per year in expense is being spent on paying fraudulent claims; and partly as a result of that, ICBC spends more than $300 million per year in lawyers suing people and defending against claims when it denies coverage to people it thinks are committing fraud. When you’re spending that much money countering this boogeyman of fraud, everyone starts looking like a fraudster.

It’s a bit odd, because ICBC doesn’t actually have any evidence fraud is costing the hundreds of millions it claims. All references to how much fraud is occurring come from industry estimates. And to provide an example of how much is wasted on investigating fraud, hear this: ICBC’s Special Investigation Unit completed “close to 10,000 investigations in 2016 alone,” but has secured JUST “550 convictions from 2010 to 2015.” If securing a conviction is considered a success, this means ICBC’s fraud investigations team has a .0091% success rate per year.

Everyone’s a fraudster, everyone’s a liar

We thought it might be educational to show a few examples of what ICBC considers fraud. In the latest case to grace the BC Supreme Court, ICBC decided a 59-year-old woman suffering from multiple sclerosis was the perpetrator of lies: specifically, that she allowed her son, who is prohibited from driving, to use her car (he crashed and totalled it), and that she then lied and claimed her car was stolen.

ICBC claims the owner wilfully made false statements, and denied her coverage. Funny thing was, ICBC had initially intended to provide her coverage.

According to evidence in court, the ICBC adjuster assigned to this owner’s case “would have granted coverage,” but “the matter was referred to another adjuster.”

ICBC alleged two things, that the owner in fact gave permission to her son, who she knew was prohibited from driving, to use the vehicle. The second allegation is that she then knowingly lied about it.

ICBC used these circumstances to substantiate their allegations:

• no forced entry, so a key must have been used since the vehicle had an immobilizer
• keys went missing around the time the son had stayed with the owner
• the vehicle was returned after an accident in August 2015
• the owner did not report the August 2015 accident
• some of the son’s belongings were in the vehicle
• ICBC did not see a walker or handicap sign in the vehicle
• the owner claims to have a poor relationship with her son, but was in contact with him
• the owner says her sons “do not come and visit me” but her son stayed with her in August
• the owner says she was “typically” the only person who drives, suggesting others may use it
• she made contradictory statements about the whereabouts of her keys

Fortunately, the court determined this was more likely a case of a son who is prohibited from driving stealing his disabled mother’s vehicle. The court accepted that the owner didn’t know about the August accident because the son was driving, and he hadn’t told her about it.

Here’s the woman’s story:

She has suffered from MS for 18 years and this has affected her memory. Her son had been staying with her for a few weeks in August 2015 as he was recently released from hospital and was still ill. Some of his belongings remained in her trunk, from that time. She had no contact with him after he moved out. He was not permitted, and has never to her knowledge, used her vehicle. Around this time, her “main” set of keys for her car went missing. She used the spare set instead.

The night of the crash, a police officer called her while she was sleeping to ask if her car was still parked. It wasn’t. She looked for her keys but couldn’t find them. In the morning, she found a set of keys and thought they were her vehicle’s keys, when instead they were “similar-looking keys” for a previous vehicle she owned. When ICBC called, she told them her keys were at home; a point she later corrected.

“(the owner) said she had never intended to mislead ICBC and until her examination for discovery she had genuinely believed she had located a key for the Jaguar.”

The court sided with the owner. It determined what likely happened was the owner’s son had taken a set of keys when he stayed with her in August 2015, and had access to a set of keys when the vehicle was stolen in September. Again, in our view, this appears to be a case where a disabled mother was taken advantage of by her son, and doubly punished by ICBC, which denied her coverage for theft.

In this case, as in many others, ICBC attempted to pick apart the facts one by one, using the thinnest of circumstances to support their allegations.

A passenger was drunk? He must have been the driver!

In another recent case brought to the BC Supreme Court, ICBC claimed to be victimized in a “straightforward case of insurance fraud,” because ICBC didn’t believe that a man who had been drinking had asked his wife to drive, and that she was the driver when the vehicle crashed.

If securing a conviction is considered a success, this means ICBC’s fraud investigations team has a .0091% success rate per year.

ICBC said several factors supported their allegation:

– the owner (who had been drinking) was the usual driver of the vehicle

– a witness (who didn’t have a good view of the car) only saw two men and a child leave the vehicle, when the driver was apparently female

– that the owner had a strong motive to hide his drinking, if he had actually been drinking and driving

– that the “accident is strange and unexplained”

– that the family in the car gave different accounts about where the child was seated

It’s really rather silly. The collision was a serious one, where the vehicle plunged into a house and struck a woman inside. Police attended and even spoke with the female driver, who said she simply “got dizzy and couldn’t find the brakes.” No independent witnesses saw who was in the driver’s seat at the time of the crash, and of course, its occupants said the female driver – who was sober – was driving.

“There is no direct evidence that Mr. Mehat was driving the car or, to put it another way, that Ms. Mehat was not driving the car. The only direct evidence, that is, from any witness who was in a position to know who was driving, is that Ms. Mehat was driving the car.” – Justice Murray Blok.

It wasn’t a surprise to us that the court sided with the owner of the vehicle. ICBC may call this a clear case of fraud, but in our view, all the insurer has demonstrated is its tendency to embark on fishing expeditions of accusing innocent drivers of committing fraud.

These allegations can be extremely harmful to those accused of committing fraud, who must often hire legal representation to fight off the allegations, even if they were innocent in the first place. If ICBC is denying your coverage and accusing you of misrepresentation, give us a call.

This type of fishing expedition happens more often than you think, and as you’ve seen, ICBC will use the flimsiest of circumstantial evidence to support their allegations.