The Canadian property and casualty insurance industry paid an estimated $500 million last year for personal injury insurance claims that contained some form of fraud, according to a study released today by the Canadian Coalition Against Insurance Fraud.

The study, Premeditated and Opportunistic Fraud in Personal Injury Claims, is the first of its kind and is based on a review of more than 4,000 closed claims that resulted in payment in the Atlantic provinces, Ontario, Manitoba, Saskatchewan and Alberta.

The study was prepared for the CCAIF by a team of researchers with the Gerald Schwartz School of Business and Information Systems at St. Francis Xavier University in Antigonish, Nova Scotia.

“We know that the number of personal injury claims has been rising in Canada even though the number of serious automobile collisions has been falling,” says Nancy Tibbo, director of CCAIF. “We commissioned the study because although we suspected that fraud may be playing a part in these rising costs, we didn’t have the data available to tell us how widespread the problem is and how much of a role fraud actually plays.”

According to the study, at least 26% of all personal injury claims in Canada contain elements of fraud. Opportunistic fraud, exaggerating the extent of an otherwise legitimate injury for financial gain, represents the most frequent type of personal injury fraud committed. Premeditated fraud was found to be less prevalent. The study also found that both opportunistic and premeditated fraud is more widespread in major cities and metropolitan areas than in small towns and rural areas.

Fourteen companies, public and private (representing almost 60% of the Canadian property and casualty insurance market) contributed to the study that examined randomly selected files from their records. In total, 4,066 closed-with-payment insurance claims were examined.