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Canada: False insurance claims leads to jail term

Wednesday, November 26th, 2014

Government and Police agencies applauded for taking action against those who commit insurance fraud

On November 24, 2014 (Toronto, ON)  Aviva Canada, one of the country’s leading providers of home, auto, leisure and business insurance, today commends the of Durham Regional Police, Toronto Police Service and the Ontario Crown Attorney’s Office for bringing those committing insurance fraud to justice.

On November 13, 2014, Superior Court Justice Christopher Corkery convicted former Aviva Canada policyholder Robert Hicks of Public Mischief (false reporting of a crime to police) and Fraud Over $5,000.00 (false insurance claim to Aviva Canada). Mr. Hicks was sentenced to four months in custody, followed by 18 months probation with the statutory condition to keep the peace. He has been ordered to pay restitution to Aviva Canada in the amount of $9,232.00.

In December 2011, Mr. Hicks received a claims settlement from Aviva Canada in the amount of $9,500.00 for the theft of his 1997 Chevrolet pick-up truck. A year and a half later, Aviva Canada’s Fraud Information Centre received an anonymous tip that Mr. Hicks’ vehicle had not been stolen, and was in a storage unit in Newcastle, Ontario. Durham Regional Police were immediately contacted and, upon locating the reported stolen vehicle, apprehended and charged Mr. Hicks that same day.

“The more we see fraudsters appropriately punished, the more we will see a decline in this type of activity which costs all insurance customers,” said Gordon Rasbach, Vice President of Anti-Fraud Management for Aviva Canada. “Jail terms, restitution payments and other hefty penalties are critical to deterring future staged thefts and accidents.”

In an unrelated matter, on November 14, 2014, Aviva Canada was awarded $12,990.00 in restitution in connection with a staged automobile accident allegedly perpetrated by Rakio Shire and three others in January 2012. Ms. Shire pleaded guilty to the charges of Uttering Forged Documents and Conspiracy to Commit an Indictable Offence. Justice Edward Kelly provided Ms. Shire with a conditional discharge, placing her on probation for three years. She has been ordered to pay restitution to Aviva Canada in the amount of $12,900.00.

“We commend the efforts of Durham Regional Police and Toronto Police Service in laying charges in these matters and those of the Crown Attorney’s office in prosecuting the cases,” continued Rasbach.

“Their continued support is vital to our efforts to protect the policy premiums of our customers in Ontario.”

Building on already strong capabilities, Aviva Canada has stepped up its tough approach to tackling fraud with more dedicated resources and an investment in technology that aims to identify fraud and even anticipate the potential for fraud before it happens. With an industry-leading anti-fraud team in place, plus solid public sector and industry collaboration, Aviva Canada is well positioned to combat fraud better than ever before. The impact of Insurance fraud in Canada is estimated at over $1.6 billion dollars annually.

Help protect affordable insurance premiums for all Canadians by reporting potential fraud to Aviva Canada’s Fraud Information Centre — open 24/7. Email or call 1-855-332-5255.

Roseman: Your travel insurance won’t cover newborn’s care

Wednesday, November 26th, 2014

By Ellen Rosema, The Star

Travel insurance rarely makes the news. But an insurer’s refusal to pick up a $1 million hospital bill for a mother who gave birth prematurely in Hawaii has turned into a big story.

Jennifer Huculak was 24 weeks pregnant when she flew with husband Darren Kimmel from her home in Humboldt, Sask., to a resort in Maui. Two days later, she had a ruptured membrane and was airlifted to a hospital in Oahu for six weeks of bed rest.

Her baby was born nine weeks early and had to spend two months in the neonatal intensive care unit. The $1 million hospital bill was mostly for the baby, she told As It HappensCBC As It Happens.

Why did the couple’s insurer deny the claim? Saskatchewan Blue Cross did not speak to the Star when contacted, citing privacy reasons.

But the company told Huculak she was ineligible for coverage because of a pre-existing condition — an earlier bladder infection that led to bleeding. She said her doctor approved the trip.

The pre-existing condition became the focus of the story. Was Blue Cross wrong in linking her premature birth to the bladder infection?

Here’s what every expectant couple should know before leaving Canada.

  • Travel insurance covers the parent, not the baby.

A mother’s health care costs are picked up by insurance if a baby is born prematurely on a trip. But any costs attributed to the baby’s health care — such as incubators, drugs or surgery — do not qualify.

The reason: Only people named on an insurance policy are covered. An unborn baby is not named or insured for travel medical coverage.

“Many people I talk to are shocked when they hear this,” says Martin Firestone, president of Travel Secure Inc. “They may travel in the last trimester of pregnancy and not know the baby’s expenses are excluded if there is a premature birth.”

You can’t insure a car that doesn’t exist or a painting that you plan to buy in the future, says Adrienne Simic, a spokeswoman for the Travel Health Insurance Association of Canada.

“The ‘babymoon’ is a celebrity trend, your getaway before the baby comes,” she points out. “But a small percentage of pregnancies result in an extreme pre-term birth.”

U.S. health care is very expensive. One day in the neonatal intensive care unit can cost $15,000. It may be safer to travel in Canada, where health care costs are covered by the government.

  • Doctors are not experts in travel insurance.

Huculak felt confident going to Hawaii, since her doctor said her health was stable. But he probably didn’t warn her that a travel medical insurance policy wouldn’t cover her baby if it came early.

“There are three rules of insurance we like to emphasize,” says Simic. “Know your health, know your trip and know your policy. The doctor is not the policy issuer and doesn’t understand the limitations and exclusions under it.”

When it comes to knowing your insurance coverage, ask the policy issuer. Most have toll-free numbers you can call to ask questions.

Even if Huculak’s doctor had persuaded Blue Cross to pay for the mother’s costs, the baby would still be excluded from coverage. And the couple would still be facing a six-figure hospital bill.

  • Travel medical insurance doesn’t cover everything.

A typical policy document is 10, 20 or 30 pages long. Its limitations and exclusions keep costs reasonable for the majority of customers who never make a claim.

Here is what one company’s emergency hospital and medical policy excludes: Routine prenatal or postnatal care, elective treatment, pregnancy, childbirth or complications of both after the 31st week of pregnancy, high-risk pregnancy or a child born during a trip.

Yes, there are gaps. But there are risks in not being covered by insurance when you leave Canada.

I used to belong to a ski club, which went on a resort in Buffalo, N.Y. A member broke her leg, leading to surgery at a nearby hospital and a five-figure debt. She probably didn’t think she needed coverage for a day trip. She probably regrets her decision.

Car insurance generally comes in two flavors: cheap or effective. Choose one.

Friday, November 21st, 2014

Here are seven surprises that might be hiding in cheap nonstandard policies.

1. No coverage, or reduced coverage, for some drivers

Generally a standard policy covers you, the listed members of your household and friends or relatives you let borrow the car occasionally.

But if you’ve got a risky driver living with you — a teenage boy with a speeding ticket, for instance — a nonstandard policy might require you to exclude him from coverage.

Some nonstandard policies also exclude coverage for permissive drivers — people who use your car occasionally with your permission. Or they might exclude coverage for permissive drivers under age 25 or 21.

In some states insurers can include step-down provisions in their policies. Under a step-down provision, the liability limits are reduced to state required minimum levels when someone who’s not named on the policy drives your car. So even if you pay for higher-than-required liability coverage, you could have less protection when you let a friend borrow your car than when you’re driving.

2. More driving record checks

“Insurance companies typically only check the driving records of preferred drivers once a year, sometimes even every other year,” Gusner says.

But if you already have a checkered driving history, then the insurer might check your driving record every six months, before each coverage term begins, so it can adjust the premium accordingly.

3. No special benefits

Don’t count on getting some of the extra goodies advertised by major insurers on TV for their best customers.

“Usually a nonstandard policy will come without the perks of a standard policy — no vanishing deductible or accident forgiveness,” Gusner says.

Even those perks aren’t really free — those customers’ premiums are higher — but they aren’t usually an option for the nonstandard customer.

4. No coverage for punitive damages

If you cause an accident and are sued, some nonstandard policies exclude coverage for punitive or exemplary damages. That means you’d be on the hook for paying those damages if a court sides with the other guy.

5. Less coverage for repairs

Under collision or comprehensive coverage, a standard policy generally pays for the full cost of repairs unless the car is declared a total loss. If the car is totaled, the policy pays the depreciated value of the car — its market value immediately before it was damaged.

But some nonstandard policies take depreciation into account even for repairs. Instead of paying the full amount to repair hail damage on an older car, for instance, the policy would pay only a percentage of the cost, based on the vehicle’s depreciation.

6. Lower mileage allowed

Some policies designed for specialty cars have very low mileage caps, such as 2,000 miles a year. Even if you don’t use the car for everyday driving, the allotment may not be enough if you travel to car shows. Think about how much you’ll drive the car, and make sure the policy includes enough mileage to cover it.

7. No coverage for pizza delivery

Some nonstandard policies exclude liability and physical damage coverage when the car is used for any type of business purpose — including delivering newspapers or pizzas.

A cheap car insurance policy is great at first … until you’re left holding the bag.

Saskatchewan family struggles with insurance after being billed $1 million

Wednesday, November 19th, 2014

A family in Saskatchewan that is facing a nearly-$1 million medical bill after giving birth in the United States is just the most recent Canadian to find themselves juggling unexpected expenses.

But while the family in question believes believe their travel insurance is in order, experts are urging travellers to read the fine print of their policies before jetting off to parts unknown.

CTV News reports that Saskatchewan resident Jennifer Huculak and her husband were left holding a $1 million medical bill after she unexpectedly gave birth during a vacation to Hawaii.

The birth came nine weeks early and the child was placed in intensive care for two months. Huculak herself required six weeks of bed rest in a Hawaiian hospital.

She told the network that he purchased Blue Cross insurance and received approval from her doctor to travel. Still, the family returned home with a lofty bill by which to remember the trip.

“It makes you sick to your stomach,” she told CTV Saskatoon. “Who can pay a million-dollar medical bill? Who can afford that?”

Saskatchewan Blue Cross did not return a request for comment from Yahoo Canada News. However, CTV News cited a letter the insurance agency sent to Huculak noting that she “was diagnosed and treated for a high-risk pregnancy in the six months prior to departure.”

Blue Cross called this a pre-existing condition that nullified her insurance, though Huculak says it was a simple bladder infection that led to bleeding.

While the argument is surely frustrating for the Huculak family, it is by no means the first time misunderstanding has led to hefty medical bills for Canadian travellers.

There have been recent horror stories from a North Bay, Ont., senior who was billed $128,000 for a kidney failure in Florida after apparently filling completing her insurance documents incorrectly.

A North Vancouver senior was billed $112,000 after suffering pneumonia in California.

Another Canadian pensioner was billed $50,000 after suffering a blood clot in her leg. Her insurance company refused to pay, citing a kidney disorder as a pre-existing condition.

There are countless other complaints for tens of thousands of dollars, usually pitting travellers who believed they had proper coverage against companies who believed they did not.

While every insurance coverage debate is different, the reaction to each is similar: frustration mixed with outrage, compounded by a sense of injustice. But it doesn’t have to be that way.

Chris Krug, a travel insurance expert with Kanetix, an online insurance comparison site, says insurance companies genuinely want to help.

“They never want to be in a position to deny a claim,” Krug told Yahoo Canada News on Tuesday. “When they talk to you, they are straight-up with you. But it is for a reason, they are taking the traveller’s best interest in mind.”

Kurg says every claim its own set of rules and policies about pre-existing medical conditions, and its own set of rules about when and how it is safe to travel when pregnant.

It is worth noting that the Canadian government lists weeks 18 to 24 as the safest time for a pregnant woman to travel, with most common obstetric emergencies happening in the first and third trimesters. It also urges pregnant travellers to review their insurance policies to ensure they are covered.

Kanetix works with nine different insurance companies and each one has its own statement and guidelines defining what will be covered. Some policies will cover a woman travelling within her first 18 weeks of pregnancy; others will offer coverage up to 32 weeks. In almost every case, coverage will not extend into the eight weeks ahead of the child’s expected date of arrival.

Most emergency medical coverage will help alleviate the cost incurred by the expecting mother, while some others will extend that coverage to the newborn.

“Always speak with your medical professional and get their input about whether it is safe or not, whether it is safe to be on airplanes versus driving,” Kurg said. “My next advice would be to shop around for the best price, but be sure that once you get the prices you are speaking to the insurance companies directly to make sure that all your needs are covered. For yourself and for the expected child.”

None of this will come as much solace for Huculak, who maintains that she was travelling within an appropriate timeframe under appropriate insurance. But it should be a reminder to the rest of us to check our travel insurance carefully. Snafus are more common than you’d think.

Update: Saskatchewan couple is considering filing for bankruptcy after being hit with a medical bill of nearly $1 million, incurred after their daughter was prematurely born during a trip to the U.S. last year.

Home insurance dispute over value of contents

Thursday, November 13th, 2014

Stuart and Annie Brown of Markham, Ont., are fighting that battle.

A life-changing moment occurred for the couple on Dec. 23, 2013.

The Browns were living in St. John’s at the time and sitting by the Christmas tree when Annie Brown noticed a small flame near the wiring for the lights.

“Before we could do anything further, the tree exploded into flames…. The whole tree just went up and blew back on me,” said Brown’s husband.

Christmas fire leads to year-long insurance coverage battle
The Browns’ St. John’s home appears after it was gutted by fire last Christmas. (Stuart and Annie Hall)

He was burned so badly, he said, that he was in a morphine-induced coma for seven weeks and stayed in hospital for several months.

His wife suffered from smoke inhalation, as well as frostbite because the pair had to run outside into the snow in their bare feet. They only had moments to escape the flames that destroyed their home.

“We’ve lost everything. I mean everything. We’ve had to start from scratch,” Annie Brown told CBC News.

While her husband recovered in hospital, she started the process of dealing with Johnson Insurance.

‘We had a very beautiful home, we had beautiful things that we loved and treasured and we’ve lost everything.’
-—Annie Brown, owner of home destroyed by fire
The couple had paid premiums to the same insurance company for 30 years, and now they needed Johnson Insurance to pay out.

The Browns eventually settled on an amount for the loss of the house. But almost a year later, they are still fighting for the value of the contents, Annie Brown said.

“Isn’t that why you have content insurance in the first place? So it seems to me that should make it quite simple. That’s what we were paying premiums on.”

You pay the premiums every year, but if your home was damaged or destroyed, would you get the amount you’re insured for?

Not necessarily.


12 must-ask questions when buying or renewing home insurance

What does my home insurance policy cover?
Is there a specific kind of insurance for the type of home I live in?
Are there certain risks or potential perils to my home for which I can’t buy insurance?
Is optional coverage available for perils like earthquake, flood or sewer backup that are not normally included in my homeowner’s policy?
What things could happen to my property that won’t be covered unless I make special arrangements?
What are some items that might require additional insurance?
What is a deductible? How does the deductible affect the price of my home insurance?
Am I entitled to any discounts?
What is the difference between replacement cost and actual cash value?
Is my home business covered by my home insurance policy?
Should I make a claim for every loss?
What kind of liability coverage do I have? How much do I need?

Source: Insurance Bureau of Canada

Rosa Marchitelli, CBC News

Think About Insurance Before Travel – Experts Say

Wednesday, November 12th, 2014

It’s that time of year again, when Canadian snowbirds head south, and should be thinking about what kind of medical coverage they’ll need in the United States. The problem, experts say, is many Canadians don’t want to consider the scary possibility that they may face a catastrophic medical emergency and need to be treated in a U.S. hospital.

According to a recent survey conducted for TD Insurance, only about half of Canadians aged 50 and over bother to check their coverage before leaving for vacation, and only 16 per cent call their insurance provider to determine if they need to update their policy.

Are you reviewing your clients’ travel insurance need this time of year? In addition to travel health insurance, its important to review homeowners and vehicle policies as well.

When buying insurance, consumers should take care to know what they are covered for and what they are not – high risk activities, for instance. And they should declare pre-existing medical conditions, which could cause them to have their claim rejected.

“The horror stories I’ve heard usually have to do with people who purchase insurance and think they are covered only to find out their claim is being denied because they did not disclose a medical condition they had before travelling,” says Dave Minor, a vice president responsible for life and health insurance at TD.

Canadians are accustomed to not worrying about who pays the medical bills; all they need to be concerned about is recovery. In the United States, hospital bills can run as high as $15,000 a day. At that rate, it doesn’t take much time to get into serious money.

David Redekop, the principal research associate at the Conference Board, says the issue of Canadians travelling to the U.S., or really any country, without insurance is much more prevalent among ordinary vacationers than so-called snowbirds.

The risk-takers are the day-trippers or those who only go for a week or two of sun, beach and golf.

There is a strong market for Canadian insurance agents to provide coverage for snowbirds. About 1.3 million snowbirds travelled south last year and took out about $200-million on insurance premiums, with the average individual premium about $700, according to Redekop’s research. The amount was almost double that for those 65 years and over staying three months or more.

There are other forms of coverage snowbirds should consider before leaving.

Many home insurance policies do not specifically cover incidents such as burst pipes, unless the homeowner has made arrangements with a neighbour or friend to regularly check the home, or they have an alarm system.

Most auto insurance policies will cover snowbirds driving their own vehicle in the U.S., but Minor says they should make sure their liability ceiling is high enough for the American court system. He recommends up to $2-million.

Impaired Operation of a Motor Vehicle

Friday, November 7th, 2014

With all the advertising in the media about impaired driving everyone should know not to drive their car or truck while under the influence. But what about other conveyances?

There are quite a few ways to run afoul of the impaired legislation. Section 253 of the Criminal Code starts out with “Every one commits an offence who operates a motor vehicle, or vessel, or operates or assists in the operation of an aircraft…while…impaired by alcohol or a drug.” Lets examine the motor vehicle portion of that. A motor vehicle is defined as a vehicle that is drawn, propelled or driven by any means other than muscular power, but does not include a vehicle of a railway that operates on rails.

A moment of thought can come up with all sorts of motor vehicles. Forklifts, snowmobiles, golf carts, mopeds, earthmovers, skidders, backhoes, lawn mowers, tractors, combines, electric wheelchairs and more. The list is only limited by our ability to put a motor on it.

A person might be tempted to comment that most of the examples in the previous paragraph don’t normally operate on a highway. Well, neither do vessels or aircraft and it is an offence to operate them while impaired. In fact, being on a highway doesn’t even enter into the picture. It is possible to be convicted for doing circles in your backyard on a snowmobile in January or zooming down the fairway in a golf cart in June if you are impaired.

A closer reading of the section will even show that a person can be convicted of impaired operation with a blood alcohol content less than .08!

If you are going to consume alcohol or take prescription or non-prescription drugs consider carefully before you operate any conveyance with a motor.

Cst. Tim Schewe (Ret.) runs DriveSmartBC, a community web site about traffic safety in British Columbia. For 25 years he was an officer with the Royal Canadian Mounted Police, including five years on general duty, 20 in traffic and 10 as a collision analyst responsible of conducting technical investigations of collisions. He retired from policing in 2006 but continues to be active in traffic safety through the DriveSmartBC web site, teaching seminars and contributing content to newspapers and web sites

Travel Insurance for Daredevils? You bet!

Friday, November 7th, 2014

While many travellers can take the risk to travel without insurance, extreme sports enthusiasts are imprudent if they take the same chance. If you enjoy taking trips to places where you can ski, paraglide or dive, you may need to know about travel insurance: •While you can do without trip cancelation and lost luggage insurance, a policy that covers medical treatment, evacuation and repatriation to your country of origin is a must. If you injure yourself during your adventures in a foreign country, you will be financially responsible for the evacuation to hospital, the hospital bills and the repatriation. This can run well into the hundreds of thousands of dollars, a sum that will bankrupt most of us completely. •Standard travel insurance policies do not cover extreme sports and equipment. They replace lost luggage, not expensive sports gear, and they pay the medical bills of medium-risk travellers, not high-risk ones. You need a specialised policy, which many travel insurers now offer. •If your extreme activity of choice involves expensive equipment such as customised surfboards, snow or diving gear, specialised adventure travel insurance policies usually cover the replacement cost if you damage or lose it. But they do stipulate an amount beyond which they do not replace equipment, so make sure your toys are below that limit. •Travel insurance policies are now available for just about any high-risk activity, but read the fine print to make sure your insurer does not exclude certain activities altogether, or that it does not set height, depth and other limits on your favourite sports. Most insurers prohibit travel to countries that the federal government warns against. •Insurers rank activities according to their risk level. Bungee jumping and rock climbing, for example, are usually ranked in a lower risk band than shark cage diving and class five white water rafting. Unsurprisingly, the higher-risk ones have more costly premiums. Decide what you want to do before your holiday, since most insurers do not allow you to upgrade your policy later. Policy prices vary wildly depending on their duration, permissions and prohibitions, but you are unlikely to find one that covers you for less than $200 per month. Compared to the possible medical bills, this is less than it appears.

Driving a collision damaged vehicle

Tuesday, November 4th, 2014

You’ve been involved in a fender bender and now your vehicle is damaged. The headlight is pointing at the sky, the signal light is missing and the bumper had to be removed so that the tire has room to steer. The appointment with an insurance adjuster is pending, and you can’t even think about the body shop yet. Can you just keep driving until the vehicle is repaired?

Strictly speaking, the answer is no. Division 2.02 of the Motor Vehicle Act Regulations applies to a vehicle on a highway that ceases to be properly equipped as required by the Act or Regulations as a result of collision or breakdown. The vehicle must be removed from the highway forthwith and may only be removed or taken to a place of repair by a tow truck or other vehicle capable of safely carrying out the movement.

The tow truck may move a vehicle that is not properly equipped if the driver takes reasonable precaution for the safety of other traffic.

If you prefer to remove the vehicle yourself, you would have to turn it into cargo by loading it onto a trailer or flatdeck. Using a towing dolly or other device such as a tow bar or chain would amount to operating the vehicle on a highway. Operation requires that the vehicle be properly equipped in all respects.

Reference Links:

Removal in Case of Collision or Breakdown – Division 2.02 Motor Vehicle Act Regulations
Standards of Safety and Repair – Division 7.09 Motor Vehicle Act Regulations
Equipment of Motor Vehicles – Section 219 Motor Vehicle Act


Cst. Tim Schewe (Ret.) runs DriveSmartBC, a community web site about traffic safety in British Columbia. For 25 years he was an officer with the Royal Canadian Mounted Police, including five years on general duty, 20 in traffic and 10 as a collision analyst responsible of conducting technical investigations of collisions. He retired from policing in 2006 but continues to be active in traffic safety through the DriveSmartBC web site, teaching seminars and contributing content to newspapers and web sites.