Car Insurance fraud is one of the leading causes in rate increases within insurance companies. When customers attempt to secure funds from their insurance company by submitting fraudulent claims, it’s the other customers who are hurt the most. Insurance fraud is common, and it’s vast. Whether insurance fraud is considered a misdemeanor or a felony in a court of law depends on the governing laws in each state, the severity of the fraudulent claims, and whether the fraud falls into the category of federal law.
What is Insurance Fraud?
Any intentional misinformation provided to an insurance company in attempt to collect a payout not due to the person submitting the claim is considered insurance fraud. This occurs in numerous fashions.
– Healthcare Fraud – When a person or business submits false information to a health insurance provider in an effort to make more money than actually owed, it’s considered healthcare fraud. It’s common in doctor’s offices when the staff submits claims for procedures they didn’t provide to patients. The only way it’s discovered is when the insurance claim is then mailed to the patient and the patient takes the time to go over the statement and dispute any charges they did not incur during their visit. When insurance pays for all their procedures, most people don’t bother to read their insurance statements to even notice this kind of fraud. These are fraud claims illegal under federal jurisdictions.
– Property Fraud – This occurs when someone falsifies information on a homeowners, renters or business insurance property. For example, a homeowner who burns down his or her own home in an effort to collect the insurance payout is charged with property insurance fraud. Another common property insurance fraud claim is stealing a person’s own expensive items to report them as stolen to the police and insurance company for a payout.
– Life Insurance Fraud – This occurs when a policyholder or beneficiary fabricates the death of the policyholder in an attempt to collect life insurance payouts.
– Automobile Insurance Fraud – When a person exaggerates how badly damaged his or her vehicle really is, it’s called insurance fraud.
For someone to be considered guilty of car insurance fraud, prosecutors are required to prove numerous charges.
1. The fraud was committed knowingly and intentionally
2. The lies told to an insurance adjuster must be related to the outcome of the payout
When a person files a claim about their car accident with the insurance company and accidently makes a mistake on the report, such as filling out the make, model, and year of their other car instead of the one involved in the accident, it’s not intentional. Sometimes people make mistakes when filling out paperwork, especially if they’re distracted or using pain medication from the injuries they received during the accident. The prosecutor is required to prove this statement was made intentionally, rather than by mistake for a car insurance fraud defendant to be found guilty.
The second most important evidence the prosecutor must submit is proof that the misinformation provided to the car insurance company played a role in the outcome of the claim. For example, if a person in the accident said their car was much nicer than the car that hit them even though it wasn’t, it doesn’t have any effect on the outcome of the claim.
Penalties for Car Insurance Fraud
The defendant in a case like this could face soft fraud or hard fraud charges. Soft fraud charges occur when the defendant exaggerates the damage done to their car or health during an accident. Any person found guilty of soft fraud faces up to one year in jail, community service and probation hours, and fines. It’s considered a misdemeanor charge.
Hard fraud is more serious. A good example might be a car owner asking a friend to hide their car in their garage for a few months so they can report it stolen and collect the insurance payment. It’s a fabrication of the entire incident, and it’s a felony charge. It’s punishable by prison time of several years, hefty fines, and a felony criminal record. Attorneys with car accident insurance fraud are knowledgeable and capable of defending defendants accused of this crime.