Gouging by the insurance industry

In 1987, the Ontario government ordered that there was to be a public Inquiry into how the car insurance companies in Ontario operate. It was called the 'Inquiry into Motor Vehicle Accident Compensation in Ontario' After the commissioner of the Inquiry read my brief, he invited me to appear before him on March 16, 1987 and present my brief. He also instructed all the heads of the insurance companies to be present when I spoke at the session. What follows is my brief.

Many years ago, I appeared before a group of legislators and warned them of the potential danger of insurance companies ripping off the public. Nothing that was concluded at those hearings changed anything and we still hear of innocent motorists being gouged by certain insurance companies who have climbed onto the compulsory insurance bandwagon and are milking the driving public for everything they can get from them.

I don't intend to reiterate in great detail what you no doubt will be hearing of these unsavory practices so for now, I will go directly into an area of car insurance that you may not be familiar with. I am speaking of insurance investigation and what it can do to cut down some of the high costs of insurance.

My experience as a former private investigator in which I investigated hundreds of insurance claims over a period of four years, (claims in which the claimants had suffered serious injuries,) places me in a unique position in which I can describe how most of the investigations resulted in awards that were minimized because the claimants were making fraudulent claims.

In one particular case assigned to me, the claimant was a man in his early sixties who had been struck by a school bus. He quit his job in the expectation of getting a sizable award from the court and decided to wait out his last three years before retirement, sitting at home. He was asking for a large amount of money for damages to his neck which he had claimed caused him great difficulty in bending. For several years, investigators had driven up to his residence which was in farm country, to catch him doing some kind of work but by the time they arrived, his neighbours had already warned him of a strange car in the neighborhood, and he would be waiting for the investigator, sitting on his porch with his neck brace on, for the investigator to see.

I realized that this was the wrong way to investigate this claimant so by using a pretext, I was able to approach him directly and talk to him about something entirely different than his accident. From our conversation on his porch, I got a good description of him and observed that someone must have been doing some digging in the back yard. Half an hour later, after driving out of the area, I returned, and after parking my car a mile away, I proceeded through a corn field, a swamp and then a forest and ended up approximately two hundred feet behind his house.

There he was, digging a ditch, without his brace---and there I was, snapping pictures like I was shooting through a knot hole of the fence of a nudist camp. I couldn't get enough. But alas, his ears began picking up the telltale clicking of my camera shutter and he stopped what he was doing and began staring at me through the underbrush. His eyesight must have been as acute as his hearing for suddenly he bolted into the house after grabbing his neck brace which was on the ground. I in turn bolted in the opposite direction and about half an hour later, I reached my car parked on the highway. And right behind my car, was the car belonging to the subject of my candid camera. Oh, yes, his neck brace was on, but it had to be for show because while he was wrestling with me in the ditch, while trying to grab my camera, his neck was moving around like a dog in heat.

Not one car passing by; stopped while we were fighting in that ditch but as fate would have it, a bus driver did stop to see what was going on. Would you believe it? It was the school bus driver that struck him three years earlier.

The smile on that man's face was not unlike that of the man who won the fourteen million dollar lottery. He hadn't had this much fun since the day they ended prohibition.

I never did learn how that case was settled but I do on occasion, fantasize about the claimant walking out of the courtroom with a two-hundred dollar award for his retirement.

One day, several of us were called into our chief investigator's office and were asked if anyone wanted to go into a strip tease joint and take movies of one the strippers. This was at a time when decent folk wouldn't be caught dead in such a place. After volunteering for the job, I arrived there and sat a couple of rows from the stage and surruptiously eased out the movie camera.

It seems that one of the strippers had injured her arms in a car accident and subsequently couldn't work in a factory---or so her statement on her claim said. We had been advised that she had taken a temporary job as a stripper and part of her act included reaching around her back and undoing her brassiere. Now anyone who has ever undone their brassiere can attest---(and I will exclude you Mr. Commissioner as an authority on this subject, if you will do the same for me) the undoing of one's brassiere by reaching around one's back is a task fit for a contortionist---not a claimant with injured arms.

Well, there she was, wiggling and giggling, for those of us out there who had never watched a woman undo her brassiere---I wasn't married at that time. Well I got so engrossed at what I was watching; that I forgot to operate the camera. I was forced to watch the entire show before this stripper returned to do her act. You know, I hadn't had that much fun since the last days of school. This time nevertheless, I was ready to film her.

Have you ever tried to surruptiously take movies in a strip joint with a camera that makes noises like a crankcase without oil? To cover up the noise of the camera, I pretended to snore. There is nothing that infuriates a stripper more than a patron who sleeps through her act, and snores to boot.

I didn't get enough frames in that segment of her act, so I sat through another show and caught her act a second time around. This girl will forever have ingrained in her memory, the experience of having a patron sleep and snore through both her acts---and a fact which couldn't have escaped her; that insensitive slob never slept and snored through the acts of the other girls.

The next case was a most interesting one. The accident had taken place a few years earlier and was coming up for trial in about a week’s time. The insurance company suspected that the man was faking his injuries. He claimed that his back was still too sore to bend and hence, his sex life had been deeply curtailed. I would sure like to know what technique he was using. In any case, one of the other investigators had let the air out of one of his tires and then we positioned ourselves around his car like piranha waiting for a hapless swimmer to step into the water.

And just at five, he came out of his office and walked to his car. There we were, hearts beating, our fingers poised over the shutter buttons of our cameras waiting for him to do his thing. He didn't. He looked at the flattened tire, cursed, pulled out his keys and unlocked the door of the car next to his and drove away. Unbeknown to us at the time, he had two cars parked in the lot.

After returning home, it suddenly dawned on me that he might return to replace the flat tire, after changing into old clothes. I was right. I returned to the site just minutes after he had. It was raining quite hard and lightning and thunder were with us every few minutes. I couldn't have been more than twenty feet from him as this claimant began jacking up his car. Fortunately I was behind him and he couldn't distinguish between the lightning flashes and those of my camera. When I offered to turn on my headlights so that he could see what he was doing, he thanked me and as a result, the entire area he was in while he was changing the tire was lit up.

What I got, was pictures of him, squirming under the car, twisting here and there, lifting the wheel above his chest---well all I can say is that this sex act he was deprived off, must have been one hell of a sex act. It would have put a gymnast to shame.

I remember the first case I was sent out to investigate. I was pretty green and really quite naive. I actually believed that all I had to do was to call up the claimant, interview him and conclude from the interview that he was faking his injuries.

Well, the man graciously granted me the interview. There he was in bed, moaning and groaning. I hadn't heard noises like that since the day I slipped into an American adult cinema and watched "Deep Throat" He told me that several years previous to this particular date, he had nearly broken his back in a car accident and therefore was bedridden most of the time. He had me in tears.

When I finished interviewing him, I visited his neighbours and one of them said, "Did you know that they are moving tomorrow?' What does such a man who is bedridden, do on moving day? Well, for one thing, he lifts one end of a fridge. For another, he carries boxes, and he even carries a 19 inch television set all by himself. What does a green and naive investigator do when all this is happening? He makes sounds not unlike those of a virgin experiencing her first sex act---he screams with joy.

It was only one other time that I phoned a claimant to make an appointment for an interview. This woman called her lawyer and was subsequently advised not to meet with any investigator under any circumstances.

The next day--I remember that day, it was bitterly cold, I waited about half a block from her home and after a half hour had passed, she exited from her home and walked towards Yonge Street. I caught up to her and together, we got on the bus and headed south. Not a word passed between us. On the second day, I said, "Good morning." On the third day, we talked about the weather and on the fourth day, we chit-chatted all the way down to Bloor Street.

She wasn't suffering from her injuries at this point---that wasn't the purpose of my investigation. She had stepped off the curb and directly into a car. What the insurance company wanted from me was an admission from her that she didn't look where she was going when she stepped off the curb.

That admission came just as we reached the curb on the fifth day of our walk to Yonge Street. The sun was extremely bright that morning and just as we were about to step off the curb, I pulled her back and said, "Be careful. A car can hit you before you see it." She replied, "That happened to me several months ago. I was blinded by the sun and didn't see the car when I stepped off the curb."

For the next half hour, she told me about the accident, and then she whispered in my ear, "You have to be pretty careful these days. Those insurance companies have spies all over the place."

Have you ever tried to stop a smile from creeping across your face? It begins at the corners of your mouth, and then when it become quite clear that in seconds; the corners of your mouth are going to meet your ear lobes, you cover your mouth with a handkerchief. There I was, coughing and blowing my nose, tears streaming out of my eyes, and that poor old lady patting me on the back, saying, "There, there. You'll be alright."

I will tell you of one more case that bears retelling. The woman was the passenger in her husband's car and there was no doubt in anyone's mind that the driver of the other car was at fault. But the woman was demanding $30,000 for the injuries to her left ankle and the insurance company was prepared to settle for only $10,000. She wanted $30,000 or nothing. The trial was to take place in less than a week. I won't go into detail as to how we got her to go to a large food store but as she was walking up the street, she limped while walking with her cane and dragging a small grocery cart behind her. I filmed her because to do the job honestly, it was necessary to film her at her worst also. After all, there are legitimate claims to consider, and I had come across those too.

Then when she came out of the store, I photographed her face with the still camera and then positioned myself to take the remaining fifteen feet of movie film. She began walking up the street, favoring her left foot that caused her to limp so badly. Then suddenly, with about ten feet left of the film, she stopped, looked around and then placed her cane in the cart and began walking down the street in a manner that can only be described as a joyous promenade.

The case went on without her or her lawyer being informed of the movies that were going to be presented as evidence at the trial. There was only about five seconds of her joyous promenade shown at the end of the film but throughout the showing of the entire film, the woman's expression on her face never changed. It reminded me of the face on the Sphinx at the Pyramids of Giza---fixed in one expression forever. She got a $2,000 award for initial pain, and she got no costs. This particular insurance company had wisely chosen not to bow to the demands of a claimant who was obviously faking her injuries. This cannot be said for some insurance companies. They feel that it is cheaper to pay out money to the extortionists rather than take their chances in the courts. Let me give you some examples of this.

About eleven years ago, my vehicle was struck by another while the other motorist was watching a woman walking along the sidewalk. The police officer became infuriated when I refused to move my car until I had taken my camera out of the trunk and photographed the accident scene. He immediately charged me with making the improper lane change. I reported the accident and asked my insurance company not to pay for the damage to the other motorist's vehicle. I said that I would rather he take me to civil court.

Later, I was convicted of the charge and I immediately appealed. While waiting for my appeal, the insurance broker informed me that the insurance company paid the man's claim of $900 and that my insurance had jumped from $250 per year to $1000 per year. A month later, my appeal was heard and I was acquitted. I immediately cancelled my insurance and the insurance company agreed with me later that they erred in paying off the man's $900 claim based upon a conviction by a justice of the peace.

In September of 1983, I was stopped in a Y intersection for six seconds because I was blinded by the lights of two cars that were about 500 feet away from me. The first car passed to my left but the second car, instead of passing to my right---as its driver intended, it headed straight for me. It hit my stopped vehicle while going 75 kilometers an hour. The car was a complete right off and mine sustained damages of about $3000. Neither I or the driver and his passenger were hurt seriously but he was taken to the hospital because he was hyper-ventilating. This was caused by the anxiety that the accident had caused him---which I can well appreciate. He had just bought the car and he hadn't insured it.

The police officer charged me with failing to share the road--where he dug that one up, I really don't know. I visited the accident scene six times and with some friends, reconstructed the accident and was able to establish that the other driver had six seconds to maneuver himself around my stopped car before he slammed into it.

During my trial, the other driver when asked why he didn't pass to the right or left of my vehicle, replied, "Why should I swerve to avoid hitting a car that shouldn't have been in the intersection in the first place." Now anyone who understands what is meant by the 'last clear chance' can well appreciate the full significance of that rather foolish statement.

Despite the fact that the justice of the peace stated in court that he recognized me as an experienced and able accident investigator, he refused to accept my findings because he said that the tests should have been done in the dark---rather ludicrous when you realize that distance and time can be determined, day or night.

This man had sued me for $135,000 and his lawyer pointed out to my insurance company that since the justice of the peace found me guilty, my insurance company should pay up. I pointed out to my insurance adjuster that I was suing the other driver and that they should wait until that case is heard by a provincial court judge.

My insurance company caved in. They felt that a jury---if it came to that, might find against me, simply because they felt sorry for the old man, who years earlier had suffered neck injuries in another head-on collision. They offered him $8,000 and had the temerity to ask me to abandon my claim against this other driver. I said I wouldn’t but I did sign the papers giving them authority to settle with him on the condition that whatever it cost my insurance company, it would not affect my premiums. When they sent me a letter confirming that, I signed. Then I went ahead with my case against the other driver.

He caved in shortly after the judge said that he would accept me as an expert witness in my own case. His lawyer couldn't do anything to stop this man once he got on the stand. I went after him with a rapier and ended up slashing at him with a cutlass. He stomped out of the witness box near the beginning of my cross examination and said to the court that he would pay whatever I asked for. His lawyer and I agreed on an amount and the judge approved the settlement figure and that was that.

Had my insurance company listened to me, they would have saved themselves $8,000. They took the easy way out---they simply wrote him a cheque for $8,000.

What was interesting about that particular case was; that this driver had smashed head on into a vehicle prior to my own and had successfully sued for injuries to his neck. Then he smashed into mine head on and again successfully sued for injuries to his neck. Then after he collected from my insurance company, I learned that he had again smashed head on into another vehicle and he is again suing for injuries to his neck.

Now I didn't have to replace that $8,000 with an additional surcharge on my insurance premiums but you can be sure that the insurance company recovered their money---they simply increased everyone elses’ premiums. In effect, everyone paid, because the insurance company didn't have the guts to stand up to this driver and fight.

There isn't anyone in Ontario who hasn't heard of the flip flop of the apartment buildings in which the buildings were sold several times to increase their value. People were charged, companies seized and closed and the principals are facing imprisonment---and rightly so.

But how many people are aware that a young woman whose parked vehicle was hit from behind; and her insurance company spent $800 repairing it, had her insurance premium increased to $2,500? And that isn't just for one year either. Obviously she would have been better off repairing her car herself but if that is so; then what's the point of buying collision insurance in the first place? If there was ever a company that needed to be seized, put out of business and its principals put in jail, it's that insurance company.

Now you could say that all this woman would have to do is go to another insurance company. That is true but did you know that insurance companies share their secrets? It's the only industry I know of that does. The second insurance company would learn from the first that the woman's premium had been increased by three times and although they might not increase it that much, they would milk this unfortunate woman's situation for all its worth.

Last week, at the request of a lawyer, I interviewed the victim of a car accident and he told me a horror story involving two insurance companies. It seems that last August, he was driving along Sheppard Avenue West, when all of a sudden, a teenage drunk driver driving in the opposite direction, crossed over the centre lane and smashed into this victim's car. Then the drunk driver and his girlfriend, climbed out of their car and began yanking off the licence plates of their car. After they pulled the plates loose, (They had been placed on the car temporarily) they ran away. The victim chased the young man and managed to get the plate from him; but not before being kicked repeatedly in the head by the young woman.

As a result of the action of the victim, the police apprehended the drunk driver and he was charged and convicted of a number of offences. Now as it turned out, when the victim's insurance came up for renewal, it was increased by $150 and that was for public liability alone since he could no longer afford to pay for collision insurance for his own vehicle as his premiums were too high. That was because he was a new driver, having just arrived in Canada from Afganistan.

Now what does a young victim do when he realizes that his insurance company is going to stick it into him? Why he goes to another. It was then, that he learned that the insurance companies communicate with one another. The second insurance company learned that his vehicle had been in an accident and that his first insurance company paid $3,000 in repairs to his vehicle---you see the drunk driver didn't have insurance. Now when the second insurance company learned that the victim's first insurance company paid out $3,000 for repairs of his vehicle after it had been struck by a drunk driver who had no insurance, they must have been extremely pleased.

They increased the victim's insurance premiums by $400. And that is just for the public liability because, like before, the insurance companies were charging him such high premiums for public liability, he couldn't afford protection for his own vehicle.

It's sad when you think of it. Here is a young man who left Afghanistan to escape the tyranny of the Russians who invaded his homeland, only to be introduced to the tyranny of our Canadian insurance industry who invaded his pocketbook.

Is there a law against this kind of extortion? Apparently not. But can you imagine what would happen if the government took over the car insurance industry and tried to pull off these kinds of highway robberies. The government might even fall. That's why I am in favour of dumping the insurance companies---they have proven that they cannot be trusted. I mean, would you buy a used car from these people?

What I find most amusing is that after your Inquiry was created, the largest insurance company in Ontario---The Co-Operators, have placed ads in the paper in which they have made generous offers to new subscribers---and you can be sure that they are addressing their ads to new subscribers. They have said that they will stop charging drivers higher rates than their experiences, vehicle uses and accident convictions warrant. Very noble indeed.

This is the same insurance company that adds a 25% surcharge after the third minor traffic violation in three years---that is, if you are driving five kilometers over the speed limit in a 60 kilometer per hour speed zone, and you are stopped by a police officer who had nothing better to do, and subsequently convicted, and given a suspended sentence, with a loss of no points and as a result, your insurance premium can go up for three years as much as $200 per year or $600 all told for the next three years.

Now you know why our courts are filled to the brim with motorists fighting their cases tooth and nail. They are not fighting a $20 fine---they are fighting a $600 increase in their insurance premiums.

Here is another of the Co-Operator's promises. A very laudable one indeed but rather toothless. They would establish an independent appeal system to which customers may refer decisions they feel are not fair. There is no mention as to who would hear the appeal. Would it be an appeal board within their own company, an appeal board within their own industry, or an appeal board within the government?
Did you know that the insurance industry already has in force, a means in which one insurance company can ask another insurance company to submit a claim to arbitration? I don't think it works that well. The Co-Operators who are recommending an independent appeal system is the same company that refused to turn a case over to arbitration when their company and another insurance company couldn't decide who was the guilty driver.

The fact that their policy holder's vehicle had collided with a motorist who not only cut right in front of him, the other motorist later admitted to the police that he didn't intend to be in that lane in the first place. Apparently This was not sufficient grounds for the Co-Operators to take it to arbitration because they didn't believe that the arbitrator would find in their policy holder's favour. Although their policy holder was out his $100 deductible by this gutless decision, to the credit of the Co-Operators, they didn't pay the other man's claims or increase their own policy holder's insurance premium.

They and the Insurance Bureau have recommended that there be the creation of a non-government modified no-fault insurance system that would pay for most injuries and still leave room for court actions for serious injuries and death. I feel uneasy about this.

For example, who would run the system? Obviously the insurance industry. This is the same industry that jacks up the premium of a woman as much as three times a year for three years---that's $5,100 because they paid out $800 for damages done to her parked car. This is the same industry that would charge a total of $1,200 additional premiums to a motorist who was the victim of a drunk driver. This is the same industry that would pay out $8,000 to a motorist who didn't feel that he had to swerve to avoid hitting a stopped car; a motorist who has done this three times. This is the same industry that would add a three-year surcharge of $600 to a motorist who is given a suspended sentence for driving 5 kilometers an hour over the speed limit.

In my opinion, this industry is no different than the oil industry, who after being informed by the federal government that there was to be a one cent increase in the tax for gasoline, immediately hiked up the price of gas as much as three cents a litre.

I think the one convincing statement that Wayne Scott, the vice president of the Co-operators said that truly rings of the truth, is when he admitted that their move is an attempt to offset public complaints about the industry and to defuse Ontario New Democratic Party demands for government-run automobile insurance. His industry would have us believe that the truthfulness of their people has the sound of the ring of a church bell. If you're planning to listen to church bell-like tones coming from the car insurance industry, be prepared to have your ears assaulted with sound's emanating from that industry that is not unlike that of the banging of hammers against the bottoms of washtubs.

But the insurance industry should not take all the blame. Aside from the motorists who defraud the insurance industry with their phony claims, there is the legal profession to be blamed also.

I spent five years as a process server, serving hundreds of claims for car accidents. You won't believe what these lawyers were demanding. In one case, the lawyer wrote up a claim for $15,000,000 dollars. The injuries---oh, the usual; whiplash, strained back, headaches and of course, diminished sex life.

One lawyer drew up a claim for $100,000 for a woman who wasn't even in her parked car when it was struck in the rear. She was in the house. Her claim was for mental anguish she suffered when she ran out of her house and discovered that her car had been damaged.

Another listed twenty-five relatives of a motorist killed in a car accident, as plaintiffs. One of the plaintiffs was a baby who had never even met the deceased. The claim stated that this baby would be denied future comfort from the deceased, had she lived beyond her seventy years.

Have you any idea how much the no-fault insurance plan will cost the legal industry? I would say that about 50% of all the writs I served, were related to car accidents. The wailing from the legal profession will be not unlike our children, after being bad, are told they have to do without their extra spending money.

Now I don't want to go on record as having said that bad drivers shouldn't be sued or surcharged. There are drivers out there that should be jailed and when I see them driving like the psychopaths they are, I take some pleasure in letting my imagination go wild and visualizing their premiums going higher than the blood/alcohol count in their bodies.

But, enough's enough. It's time for the government to step in and put an end to the automotive insurance industry in this province, once and for all. I don't know if the government can do better, but surely they can't do worse.

The insurance industry is pleading for a second chance. They are promising to be fair and honest with their policy holders. But I ask you this in all candor---if you had put your foot in the Amazon River and a crocodile chewed it off, would you at a later date put your other foot into the river at the same location? I think not. You would have learned your lesson the first time and treat the crocodiles with a little more respect.

Well, the insurance industry placed their collective foot in the river in the past and had it chewed off. Their experience didn't teach them a thing and as a result, they hobbled back into the crock-infested river and now they are again pleading for someone to pull them out again lest they lose their other foot. Let the crock have the other foot.

I sincerely hope that the motoring public will get a decent break from this Inquiry and this government. It's certainly overdue. I think I speak for all motorists in Ontario when I paraphrase the MacDonald's commercial---We deserve a break today, in Ontario.