Insurance fraud is a crime. It is a huge problem throughout the United States. According to the FBI (fbi.gov/stats-services/publications/insurance-fraud), the total cost of insurance fraud (non-health insurance) is estimated to exceed more than $40 billion per year. That means Insurance fraud costs the average American family between $400 and $700 per year in the form of increased premiums. Given the enormous costs of insurance fraud, prosecutors take this crime seriously and aggressively investigate and prosecute those suspected of committing insurance fraud.
What Is Insurance Fraud?
Insurance fraud is an act committed by a person (usually the insured) to defraud the insurance company where the person knowingly lies to the insurance company in order to obtain a benefit or payment they are not legally entitled to. Perpetrators of insurance fraud include insurance policy applicants, policy holders, third-party claimants and professionals who provide services to claimants. If the insurance claims adjuster suspects the claim is fraudulent, it will assign the claim to the Fraud Department for further investigation and subsequently to a detective and the local prosecutor’s office. Any type of phony, fake or fraudulent insurance claim can result in criminal prosecution including auto collision or theft, homeowner’s, and medical insurance. The actual loss to the insurance company is not required as long as the prosecutor can prove the suspect had the intent to defraud and commit the crime. This can lead to misdemeanor or felony charges, and if convicted could result in heavy fines, restitution as well as incarceration in county jail or state prison.
What Does Insurance Fraud Look Like?
Here is a list of some of the most common insurance fraud scenarios:
- Receiving medical treatment for phony injuries and billing the insurance company;
- Lying intentionally on an insurance claim;
- Staging an auto accident or injury that never happened in order to collect money from the insurance company;
- Reporting a car stolen and filing a false insurance claim;
- Filing a fake auto accident claim along with phony property damage;
- Committing arson for the purpose of collecting money from the insurance company (referred to as Arson for Profit).;
- Collecting unemployment benefits from the State Unemployment Insurance Fund while you are still working;
- Faking your own death in order to claim insurance proceeds;
- Filing a false worker’s compensation claim;
- Overbilling for treatment by doctors, chiropractors or medical facilities;
- Filing a false homeowner’s claim;
- Filing a false life insurance claim;
- Filing an insurance claim under someone else’s insurance. This is a common health insurance scam where an individual obtains another person’s identifying information and then tries to make a claim against the stolen person’s insurance;
- Filing a claim for home property damage that doesn’t exist;
- Filing a false police report as part of your insurance claim;
- Falsifying information on an insurance application;
- Inflating value of items taken during a burglary or theft;
- Filing a false injury claim (e.g. slip and fall) where there was no injury;
- Falsely inflating damage repair estimates (usually committed by auto body shops and home repair experts) in order to make upgrades to your car instead of just repairs;
- Past Posting- a person is involved in an auto accident and doesn’t have insurance. This person immediately purchases insurance and waits several days and reports the accident and collects money from the insurance company.
The punishment for insurance fraud in California depends on the nature of the fraud, the monetary value of the fraud and the defendant’s prior criminal record. The range for punishment is probation (i.e. no jail time) to five years in prison, including fines and restitution. The majority of insurance fraud charges are filed as felonies punishable by two to five years in prison. Misdemeanor charges are punishable by up to one year in county jail.
The Attorneys at Stephen G. Rodriguez & Partners Can Help
The criminal defense attorneys at Stephen G. Rodriguez and Partners are experienced insurance fraud attorneys. They are hands on throughout the entire criminal process from pre-file investigation to arraignment, settlement negotiations and trial. Call the attorneys before you make a statement to the insurance investigator or detective. They will record your statement. Hiring the right attorney as soon as possible is important to avoiding criminal charges or having your case dismissed.