Insurance company

Trying to lie to your insurance company? Your car will betray you.

The story began with a 20-year-old man from Manitoba recounting how he fell asleep at the wheel of a new model Chevy Silverado, veered off the road, and crashed into a few parked cars. Fortunately, he told investigators, he had only driven five km/h over the limit in a 50 km/h zone; faster and the damage could have been much worse.

But as Manitoba Public Insurance (MPI) took a closer look at its claim, the extent of the damage seemed excessive for a vehicle barely exceeding the speed limit. The insurer’s technical team therefore examined the information stored in the van’s “event data recorder” – a crash-resistant device close enough to an aircraft’s flight recorder that it is known by the same name: the “black box”.

“The recorder confirmed the speed of the vehicle, which contradicts what the driver told us,” said Brian Smiley, spokesperson for MPI. Indeed, at the time of the accident, the vehicle was traveling at 140 km/h. The brakes were never applied. The seat belts were unbuckled.

As for the young man’s insurance claim? Refuse. Manitoba’s state-owned insurance company has saved $150,000, largely thanks to technology that debunks the fabricated stories motorists tell in an attempt to evade fraud.

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After decades of poring over skid marks and burnt-out brake motors, insurance sleuths have entered a brave new era of claims investigation, harnessing the explosion of digital technology within and exterior of modern vehicles. Even base car models are now equipped with computer-controlled components and accessories, the Big Brother implications of which are not fully known to drivers. For insurers, this is a godsend. A key fob alone can contain a computer chip containing information such as a vehicle’s VIN number, the date it was last driven, and the car’s mileage. Clever new infotainment systems are logging information about users’ recent calls, messages and locations, which can help investigators determine if a claimant, for example, texted moments before an accident. Or, for that matter, if they were the person driving.

“Sometimes we get phone calls from two parties involved in the same staged crash, as they coordinate and plan where they are going to set it up,” says Sam Kodsi, president of Kodsi Forensic Engineering. While a fender may have a relatively small payout for repairs, Kodsi says, that successful claim can open the door to bogus, and more expensive, bodily injury claims.

However, technology alone won’t allow investigators to track a growing problem that, according to a 2018 report by insurance company Aviva, adds $2 billion a year to Canadians’ premiums. In a 2017 Ipsos poll of Ontarians, nearly one in 10 respondents admitted to having ever engaged in car insurance fraud, such as asking the body shop to do additional work on a car. to be covered by insurance, lying about one’s address to get less available rates in low-risk postcodes, inflating the value of items stolen from a car or outright staging an accident.

By comparison, dodgy stories like that of the Manitoba pickup truck driver seem like the last resort of the guilty and the desperate. Last year, a Winnipeg woman told a bizarre story of thieves who stole her 2004 Chevy SUV, then messaged her via Facebook demanding a ransom for the vehicle. When she showed up to pay, the woman said, the criminals kidnapped her, then raced through the city streets for hours with her in the vehicle before crashing her SUV into another car.

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It didn’t take long to unravel the lie. The woman told investigators she had both sets of keys to the vehicle when it was stolen from her garage. Trouble is, even his 18-year-old Chevy had an ignition and immobilizer, an electronic security device that makes it impossible to drive the car without a key. “Once the truth is known, the registered owner usually admits it,” says MPI’s Smiley. In this case, the woman was actually drinking with friends and speeding around town when the car crashed, and the group left the scene of the accident.

A bigger and growing problem for insurers is fraud orchestrated by experienced operators, which is much harder to detect. Insurance crime has proliferated so much recently that industry players joined together last year to create the Equity Association, a non-profit anti-fraud organization that incorporates the Investigative Services Division of the Bureau of Insurance. Insurance Canada with National Insurance Crime Services Canada, an anti-fraud agency. fraud data analysis organization.

“Our estimate is that auto crime has increased 20% every year for the past five years,” says Terri O’Brien, CEO of Equity, who comes from the banking industry and believes fraud is migrating out of of this industry due to technological protections. . “When smart cards came into effect and eliminated credit card fraud and skimming, and when banks started to fight money laundering with detection and prevention capabilities, this crime had to move somewhere. What I can see from our analysis of the data is that it has moved squarely into the insurance industry. I consider this to be trivial money laundering.

Using machine learning and artificial intelligence, Equity is building its own advanced analytics platform that will automatically alert participating insurers when it detects suspicious patterns, regardless of which insurer is handling the claim.

“If you’re a large insurance company and you receive thousands of claims a day, there isn’t a human being reviewing every claim,” says Gary Saarenvirta, founder and CEO of analytics firm data based on AI Daisy Intelligence. . He cites the case of an insurance company that paid more than 80 bogus windshield claims to one person – one at a time, over the course of months – before embarking on the scheme. “Because a windshield claim costs a few hundred dollars, it wasn’t cost effective to have the matter investigated by an investigator,” he says. “But when you add up $300 per windshield, it starts to become a significant number.” Using AI, he later demonstrated to the insurance company, would have easily uncovered this fraud much earlier.

The tradeoff, as with so much technology-driven efficiency, is privacy. The Equity system can detect patterns of behavior from data points that we all leave in our wake, such as shared IP addresses, cell phone numbers, networks of known associates, which could all connect them to known fraudsters.

We are a long way from the days when crash zones were measured and witnesses were sought. But investigators are quick to point out that the old methods involving physical evidence and testimony are still vital to their work. And if the big story of the Manitoban sleeping in his Silverado is any guide, decades-old technology may also play a role. In this case, good old surveillance footage from a traffic CCTV camera showed that, moments before the crash, the driver had driven another car.

This article appears in print in the March 2022 issue of Maclean’s magazine with the title “Tattletales on wheels”. Subscribe to the monthly print magazine here.