How does address fraud impact car insurance rates?

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It’s safe to say that Canada’s housing market is on fire, with  large numbers  of people having moved in the past year or planning a move. With relocation comes a lot of address updating. While you might not have any problem remembering to update your address at the post office or with your bank, it’s important not to forget about your insurance company.  

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Insurance fraud might not be top of mind when a move is on your agenda, but it’s a real concern that people should be aware of. Whether intentional or not, if you don’t update your address with your insurance provider before moving, or you file a claim at your old address — there could be serious ramifications. Here’s what to know about address fraud, and how it impacts your  car insurance rate .  

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How does address fraud impact car insurance rates? Back to video

Address misrepresentation is on the rise

As reported by  Canadian Underwriter  earlier this year, “Aviva Canada data shows a 9.1% increase in Ontario and almost 7% increase in national address misrepresentation claims, when comparing pre-COVID times (April 2019-March 2020) to the past year (April 2020-March 2021).”  

It’s a well-known fact that where you live can have a  significant impact  on your insurance rate, with customers in one postal code potentially paying hundreds of dollars a year more in premiums than someone in a nearby neighbourhood. 

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Deliberately misrepresenting your address in order to take advantage of discounted insurance rates might be tempting, but it’s a case of clear-cut fraud and could cause plenty of headaches with your insurance now and down the road.   

According to the Financial Services Regulatory Authority (FSRA), those who misrepresent their address (whether intentional or not) could have their coverage invalidated (which would be as though you never had insurance, negatively affecting your history), their policy cancelled, see an increase to their premium in the future, or even being denied future insurance altogether. If you attempt to make a claim at your old address, it could be denied or considered fraudulent. If your insurance company decides to pursue a legal case against you for the fraud, you could face criminal charges and jail time, if convicted.    

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When to update your address

While you want to update your information as soon as possible, there is a bit of a grace period for you to make any changes, especially if you’re moving to another province. For example, if you move from Alberta to British Columbia, you have 30 days to register, license, and insure your vehicle at your new address.  

When a policyholder omits information or provides false information in their contract of insurance, it’s considered policy fraud. One of the most common types of policy fraud is address misrepresentation.  

Bryant Vernon, chief claims officer for Aviva Canada, has said that insurance fraud costs us all. In an interview with Canadian Underwriter, Vernon said “An estimated $2 billion in annual insurance fraud costs in Canada ultimately get passed along to honest, mostly claims-free drivers in the form of higher premiums.”  

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There’s a lot that occurs with a move, and it can be easy to forget to update your insurance provider about your new details. Mistakes happen, so be truthful with your broker or insurance provider if you’ve genuinely forgotten to update your information in a timely manner. However, it’s extremely important that you update your information as soon as possible to avoid being accused of fraud. You don’t want to be left uninsured or accused of insurance fraud because of a careless oversight.  

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