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How Private Investigators Use Surveillance to Prove Insurance Fraud

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Did you know that in Canada, it is particularly difficult to prove that an individual is claiming insurance illegally? In fact, for many North American insurance companies, it is a challenge that they often face. Why? Well, the reason why it is so difficult to prove insurance fraud is that if the individual discovers they are under surveillance. This means that they can sue the insurance company for breaching their right to privacy.

The good news is, private investigators across Canada (especially those who work in Ontario and Quebec) are familiar with this kind of legal issue. It’s the reason why so many insurance companies contact a private investigator or private investigation company to help. They know that a licensed private investigator will have the tools, skills, and knowhow to conduct an insurance fraud investigation without breaking the law. They also know that insurance companies that don’t hire a private investigator often find themselves in more trouble than they bargained for.

But what exactly is insurance fraud? And what technique does a private investigator use to catch a suspect in the act?

What is Insurance Fraud?

Insurance fraud occurs when an individual (or individuals) makes a false claim on an insurance policy. This claim often requires the insurance company to provide a payment to the individual.

Here’s an example: let’s say that a woman has insured her engagement ring. She pretends to lose it and puts in a claim for her $10,000 insurance policy. This is insurance fraud. She lied about the loss of her ring to get at the money.

While it might sound obvious to some, we can’t forget to mention that insurance fraud is illegal. Any individual suspected of exaggerating their claims could be subject to investigation. If the individual is found guilty of insurance fraud they face hefty fines and even jail time (up to 5 years!).

Types of Insurance Fraud

The term ‘insurance fraud’ covers a wide range of false claims an individual can make. In general, there are two major types: Soft Fraud and Hard Fraud.

Soft Fraud: In everyday life, people stretch the truth or exaggerate all the time. So, this type of insurance fraud occurs when an individual lies or exaggerates to maximize the return on their claim. It might seem harmless but doesn’t benefit anyone. In the long run, as it only increases the cost of insurance for everyone. Complete honesty on every insurance claim is critical to prevent the company from digging deeper into your case.

Hard Fraud: This type of insurance fraud applies to people who stage an accident, purposely damage their own property, or face losing their property. They will then make a claim. Taking insurance money in this way is absolutely illegal.

If you’re still left wondering what kinds of hard fraud claims individuals typically make, here are a few examples:

  • Inflating medical bills
  • False slip and fall injury
  • “Phantom Vehicle” damages
  • Claims for medical services not actually provided
  • Exaggerated injuries
  • Lying about facts
  • Assisting or encouraging an individual to make a false claim
  • Damaging a vehicle to increase the claim

Insurance Fraud and Surveillance

The best and, in some cases, the only way to catch someone in the act of claiming insurance fraud is to conduct surveillance. As mentioned above, this can be extremely difficult, and when done poorly, the individual can actually sue for breaching their right to privacy.

In Canada, if an individual learns that an insurance company or private investigator is watching or following them, they can take the event to court. If they win, the insurance company and/or private investigator will have to pay the individual. This is why it is incredibly important for the insurance company to base their suspicions on solid evidence before any investigation begins.

This also means that it is even more important for an insurance company to hire the right team for the job. Sending out an insurance claims representative will certainly get the company into a world of trouble. This is why insurance companies work closely with private investigators and private investigation firms. PI’s are familiar with the laws of a country, state or province. They are also trained how to properly use surveillance to catch evidence of fraud quickly, and efficiently.

How a Private Investigator Conducts Surveillance—Without Getting Caught

Private investigators in Canada must receive a license before they can legally start working for a company or start their own business. To earn their license, a private investigator must take the proper course and pass an exam. The course includes a significant amount of attention on surveillance including, techniques and tools.

A good private investigator knows that the success of any surveillance depends on not getting caught. The purpose of surveillance is to observe the suspect as they naturally go about their day. The moment the suspect knows they are being followed or watched, they will immediately alter their behavior.

For example, let’s say that an individual has claimed that they have a neck injury and cannot return to work. A private investigator would observe the individual to see if they do anything that would indicate they aren’t as hurt as they claim. So, if the individual uses their time away from work to build a deck in their backyard, they would change their behavior the moment they suspected someone was watching.

Surveillance Techniques

Private investigators use many different surveillance techniques to catch a suspect accused of insurance fraud including,

Background Check: This is probably the most important step in a private investigator’s process. A private investigator needs to know all relevant information about the suspect. This will help them to understand better the suspect, where they might go, what they might do, and more.

Plan: A good private investigator will always study the area in which the suspect lives. This helps the investigation because it becomes easy to pick a perfect and unobtrusive spot to watch the suspect both coming and going. If the private investigator needs a quick exit, knowing which route to take also makes them look like they belong in the area.

Don’t Stand Out: No private investigator should ever show up for a surveillance job in a fancy car. A private investigator does not want or need to draw attention. Their only goal is to blend into their surroundings. The moment they stop blending into the background is the moment the suspect will catch on and change their behavior.

Pay Attention: Most people think that private investigators have a glamorous, exciting job. The truth is, surveillance requires a lot of patience and long hours of sitting around and waiting. During this time, a private investigator needs to remain alert. They need to know what the suspect is doing at all times.

Teamwork: Many private investigators work with a team. The reason for this is because it makes it much easier to keep eyes on a suspect. It also prevents the suspect from seeing the same private investigator over and over again. This decreases the chances that the suspect will catch on to the investigation.

When it comes to insurance fraud investigations, most people have nothing to worry about. Insurance companies aren’t looking to hire a private investigator to conduct surveillance on every person making a claim. They know that the majority of their clients are honest. However, if they do come across a claim that looks suspicious or have reason to believe that the individual isn’t telling the truth, they do have the right to initiate an investigation.

Looking for someone to help with your insurance fraud investigations? Smith Investigation Agency can help! Contact us today: or (647) 479-8474.

About the Author

Whitney Joy Smith

Founder of The Smith Investigation Agency in 2014, Whitney Joy Smith’s extensive background as a private investigator is matched only by her passion for the role. A graduate of several respected institutions, including Northwest Florida State College and George Brown College, her early years in life were spent between Canada and the United States. This education, along with her formative years as a private investigator in various agencies, informed much of her knowledge of private investigative laws, regulations, and operating standards in both countries.

The recipient of numerous industry awards and accolades, including the Consumers Choice Award, Best in Ottawa, and many others, Whitney takes pride in working closely with her ever-growing agency to raise the bar, maintain compliance, and meet the investigative needs of clients. Whitney is active in various membership and supporting roles, including the CPIRC, CBN, CAPI, Canadian Women’s Chamber of Commerce, and many others. Her experience-driven, thought-provoking articles have been featured in everything from Readers Digest to Business News Daily, and she strives to continually redefine standards for those in the private investigative and security fields. Learn more about Whitney and the team at The Smith Investigation Agency today.

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