Staged collision schemes are emerging as a major drag on Canadian auto insurance loss ratios, with Aviva Canada reporting a 400% year‑over‑year increase in such incidents between 2024 and 2025.
The surge suggests fraud is becoming a structural issue for insurers, not just a marginal cost, according to commentary by Driving columnist Lorraine Sommerfeld.
Aviva’s claims data indicated that staged collisions are increasingly affecting multiple parts of the loss picture, including physical damage, bodily injury, legal expenses and claims handling costs. Unlike a single‑event catastrophe, Sommerfeld noted, this type of fraud is “structurally embedded in the book.”
The uptick comes as the wider P&C sector is already absorbing record catastrophe losses. Industry analysis showed insured losses from natural disasters in Canada surpassed $6 billion in 2024, nearly three times 2023 levels. In that context, fraud is acting as an “extra cat season” baked into everyday claims, exerting pressure on both base loss costs and tail exposures.
Recent staged collisions go beyond simple “fender‑bender” fraud. Sommerfeld points to recurring patterns such as multi‑vehicle “swoop and squat” set‑ups, parking‑lot “wave‑out” incidents and high‑speed staged crashes on major highways.
In a swoop‑and‑squat scenario, one vehicle cuts in front of another and brakes suddenly, forcing an innocent third vehicle to rear‑end the car in front; accomplices may block escape routes. Wave‑out scams involve a driver being signalled out of a parking space or junction and then struck by the signalling vehicle, which later denies responsibility. These tactics often lead to claims that include alleged injuries, rehabilitation, loss‑of‑income and other costs, pushing up severity.
Fraud hot spots have traditionally been associated with parts of the Greater Toronto Area, including Brampton, Toronto and Mississauga. Aviva and other market observers now report similar patterns emerging in Ottawa, Markham, Calgary and Halifax.
Sommerfeld argued that this broader geographic spread challenges some long‑standing rating and segmentation practices that rely heavily on territory, vehicle type and driver profile. Fraud, she noted, tends to cluster around particular referral channels, repairers, tow operators and legal intermediaries, not just postcodes. If those behavioural and network factors are not captured in pricing or underwriting models, better risks may end up subsidising worse ones in the same region.
She also cautioned that regional underwriting and claims strategies need to adjust quickly when fraud indicators move into new cities, rather than waiting several renewal cycles to recalibrate appetite or investigative resources.
One high‑profile case in Queens, New York, in late 2024 illustrated how dashcam footage can be decisive in proving a collision was staged. Sommerfeld notes that charges were laid in that case only because the victim’s camera captured the event.
For insurers, that raises questions about how heavily to lean on external data to distinguish legitimate accidents from engineered events. Sommerfeld suggested normalizing the use of dashcams and telematics in personal auto portfolios through incentives, rather than mandates, so that drivers who provide high‑quality corroborating data are rewarded.
She also pointed to the need for more data‑driven claims triage, where patterns such as sudden stops on known high‑risk corridors, immediate involvement of unknown tow operators, or collisions at fraud‑prone locations are treated as automatic red flags for special investigation.
Polls commissioned by Aviva showed around 60% of Canadians are concerned that fraud is contributing to higher premiums, while 43% believe current criminal penalties for insurance fraud are too weak. Industry experts see that as an opportunity to engage policyholders on the link between fraud, behaviour and pricing.
A particularly worrying development, flagged by both Aviva and Équité Association, is the rise of staged crashes involving willing participants. In these schemes, financially stressed vehicle owners agree to hand over their keys so fraudsters can stage high‑impact collisions, often on busy highways, in return for a share of the proceeds.
Such cases raise new questions around moral hazard and underwriting trust, and increase the risk of third‑party injury and large, multi‑vehicle claims. They also draw heavily on public resources - police, fire and emergency medical services - making staged collisions a wider public‑safety concern as well as an insurance issue.
While enforcement and sentencing are ultimately matters for the criminal justice system, commentators argue that insurers also have levers to pull, including tightening control of repair and tow networks, investing in technology‑enabled special investigation units and making fraud awareness part of routine customer engagement.
The direction of travel is clear: as staged collisions become more frequent and more sophisticated, Canadian auto insurers face mounting pressure to integrate anti‑fraud considerations into pricing, underwriting, claims and customer strategy, rather than treating them as a back‑office concern.
