Organized fraud affects motor insurance

The Canadian "no fault" insurance system compensates Canadian policyholders who have incurred a liability-free claim. It is this loophole that defrauders chose to use. Extremely well organized and highly sophisticated these fraudulent malpractices could cost the insurers 993 million to 1.3 billion USD.
Free riders used luxury cars and hired fake passengers to participate in premeditated accidents. They then claim compensations from insurers for material damages then for bodily injuries.
They are taking advantage of a loosely enforced legislation and of the absence of a national database keeping track of fraudulent applications.
In addition, insurers would rather compensate the damages than venture into costly investigations and lawsuits. In 2009, 10% to 15% of the motor premiums were used to cover this type of fraud.