Auto Insurance Fraud Laws and Penalties

Defense Against Auto Insurance Fraud Charges

Auto insurance fraud occurs when you attempt to defraud your insurance company by exaggerating or faking injuries from an automobile accident. It can also include being untruthful about or staging a car theft or even planning a collision with another vehicle. Any action you perform that is intentionally done to gain undeserved finances from your insurance company is considered auto fraud.

If you have been charged or accused of auto insurance fraud, you need protection by a criminal defense attorney. There are several defenses your attorney can look into for an argument against a fraud charge. Contact your attorney immediately to protect your future and reputation against these charges.

Free Consultation 818-484-1100

Auto Insurance Fraud

To counter fraud rings local governments, law enforcement entities, and automobile insurance companies have combined forces. They are working together to put a stop to faked traffic collisions that are staged to collect money through false insurance claims. Fraud rings usually involve insurance claims adjusters and others who create fake police reports and then submit them to receive cash through claims.

Staged collisions are a considerable problem for insurance companies. They involve automobile fraudsters who drive into the middle of a busy intersection or roundabout and then slam on their brakes. By slamming on their brakes, it causes other drivers to rear-end them which places blame on the other driver as it is perceived they were driving too fast or too close to stop. These false claims may even contain fake personal injuries such as whiplash or other physical damages to their person.

California Insurance Fraud

In 1979 California established a law enforcement unit inside the California Department of Insurance. One of the programs within this unit is the automobile insurance fraud. The detectives in this division are experts in their field of insurance fraud. The detectives are all trained in how to conduct criminal investigations and are also set up to provide assistance in training consumers.

The detectives in the automobile insurance fraud department are sworn peace officers. Their scope of investigating includes undercover operations, surveillance, interviewing witnesses and suspects, and also conducting full investigations into the reported accidents. The detectives will serve search warrants, make arrests, and testify in court. Their jobs also entail helping various enforcement task forces such as computer forensics, auto theft, underground economy, disaster fraud, and pharmaceutical fraud.

When you knowingly lie to obtain an advantage or benefit from your insurance company that you are not entitled to, you are committing insurance fraud. If you deliberately deny a benefit that you know is due to someone, you are also committing insurance fraud. The California Department of Insurance Enforcement Branch (CDI) accepts referrals of people who have committed insurance fraud and prosecutes them as felonies.

If you are convicted of insurance fraud, your sentence could include probation, fines, restitution, jail time in county jail or state prison, or community service sentence. Under California Penal Code you can be prosecuted for auto insurance fraud if:

  • You intentionally set out to defraud the insurance company. Auto insurance fraud is a specific form of crime, and the prosecutor has to prove you've knowingly performed an act to defraud.
  • The act to defraud is carried through to the end. If you have only made a statement regarding fraud, the prosecutor cannot charge or convict you.
  • You must have completed both the intent and the act. The prosecutor cannot convict one without the other.
  • The insurance company doesn't have to lose money if your claim was filed with the intent to commit the crime.
  • Abandon, hide, or damage your vehicle with the intent to file an insurance claim seeking repayment under your policy
  • You submit two or more insurance claims for the same occurrence to receive double compensation under your policy
  • You participate or cause an accident with your vehicle with the intent to collect on your insurance policy
  • You present written or oral statements falsely claiming you live in California with an application for auto insurance or submit false or misleading information on an insurance claim
  • You are a business owner and solicit or accept business from another party knowing they intend to commit auto insurance fraud
  • You are an owner of an auto repair center and offer insurance agents a commission or profit sharing arrangement if they refer policyholders to your shop

Often the insurance companies do not have all the information, or misinformation was given, and you are mistakenly accused of auto insurance fraud. Do not let these charges ruin your life. Contact a criminal defense attorney to protect your rights and future.

Defense Against Auto Insurance Fraud

The most common defense if you have been charged with auto insurance fraud is the prosecutor not having the proof of your intent. Also, many times claims are not false as the insurance company, or their reviewers are saying, or there was a mistake of fact. Many times, only a portion of your claim is invalid, but most of the facts are legitimate, and your policy should cover them.

If you've been charged with auto insurance fraud in California, there is a good chance you can get the charges reduced or dismissed. Contact a criminal defense attorney as they may be able to argue that you did not act with fraudulent intent or discover there is not sufficient evidence available to support the charges.

If you are convicted of auto insurance fraud in California, you will most likely be charged with a felony. There are a few cases of auto insurance fraud such as submitting a false statement or forms which are mostly seen by businesses or auto shop center, that are considered California Wobblers . Depending on the facts of the incident, these can either be charged as a misdemeanor or a felony.

If charged with auto insurance fraud and you are found guilty and convicted of a felony, you could face from sixteen months to five years in prison. Convicted as a felony also means you could be facing fines up to $50,000 or double the amount of the fraud depending which is more.

Definition of California Auto Insurance Fraud

Penal Code 548 - Damaging or Abandoning Vehicle

Under California law, you have committed a crime if you:

Abandon, hide, destroy, injure or dispose of a motorized vehicle which has been insured against such occurrences.

The act has been done with the intent to defraud your insurance carrier.

An intent to defraud is defined as purposely deceiving your insurance carrier in an attempt to receive money from them to pay money, or to cause injury to their property, financial, or legal rights. You can be found guilty of auto insurance fraud if you've done any of the above actions to a vehicle even if it is not yours and even if the insurance company does not experience a loss due to your efforts.

Penal Code 550 Fraudulent Claims

Under California law, there are several different ways you can commit car insurance fraud. One of these falls under Penal Code 550 that states it is a crime to present false claims for destruction, theft, or damage to a vehicle.

The legal definition for this Penal Code is:

You falsely claim payment for a loss of your vehicle due to damage, destruction, or theft. It also covers claiming these losses of a motor vehicle part, or the contents that were in your vehicle.

You have filed the claim with full knowledge it was false.

You filed the claim with the full intention of defrauding your insurance company. Just as with Penal Code 548, it is not necessary for your insurance carrier to actually experience financial loss from your actions.

Just as with Penal Code 548, it is not necessary for your insurance carrier to actually experience financial loss from your actions.

Penal Code 550(a) - Causing an Accident

Under California law, you will have committed a crime if you:

Participated or caused a vehicle accident.

You caused this accident in an attempt to defraud your insurance carrier.

The accident was created with the intent to defraud your insurance and receive money by filing a claim.

You are guilty of auto insurance fraud if you have 'caused' an accident which was a direct, probable, and natural consequence of your actions, and it would not have occurred had you not done those specific actions.

Penal Code 550 - Multiple Claims

You will have committed a crime in California if you:

File two or more claims on the same loss to several different insurance companies.

You have knowingly filed those multiple claims with the intent to defraud the insurance carriers.

Penal Code 550(b) False Statements

Under California law, you will have violated the law if:

You have given oral or written statements in opposition to a claim or as part of an auto insurance payment or another benefit with false or misleading information regarding the material fact.

You have created any oral or written statement which you intended to present to your insurance carrier with a goal of receiving car insurance for living in the state of California when you actually live in another state.

Auto Insurance fraud by employees or business owners

Employees, owners, or representatives of auto-related businesses violate California law and can be held criminally liable if:

They accept or solicit any form of business from any person with full knowledge that it was performed with reckless disregard and know the party they are performing work for is filing a fraudulent claim to an auto insurance company.

They offer a commission, profit-sharing, fee, or any other form of compensation to an agent of an insurance company, adjuster, or broker in exchange for sending policyholders to their shop for repairs covered by auto insurance.

Insurance Companies Can Make False Claims of Fraud

There are insurance companies that do not like to pay out on claims. One way for them to avoid paying is to look at a policyholder's initial application to see if there is an alleged fraud. They look to see if there is any evidence of intentional and material misstatement of fact, so they are able to deny coverage. If there is any such evidence of distortion of truth, they are able to cancel your insurance policy and therefore turn down your claim. They will also turn the case over to the federal government as an auto insurance fraud case for criminal prosecution.

You will need a criminal defense attorney working with you through a challenge from the insurance company. Insurance companies have attorneys working for them to file charges and see the case through the court system and you will need strong representation to ensure your case is handled fairly.

The insurance industry is very serious about investigating fraud cases and employs a staff with experience in the field of private investigators. These investigators are generally former federal agents and prosecutors with knowledge of the law and how to look for evidence that will implicate offenders. You will need someone on your side with equal experience in discovering facts and an understanding of the criminal court system.

If you are charged with auto insurance fraud, you have to take the inquiry seriously and treat it with the same gravity as you would handle other federal criminal investigations.

Insurance Companies Need Protection Against Insurance Fraud

Insurance fraud in California affects the lives of the general public as well as the insurance companies. Some of those effects include:

  • There are more than $15 billion a year filed in California each year that cost the average resident around $500 a year. This expense comes from having to pay higher premiums, taxes, and prices.
  • The NICB (National Insurance Crime Bureau) reports insurance fraud is the second highest crime in the country, bypassed only by tax evasion.
  • Law-abiding, innocent citizens, are the most affected by insurance fraud. Perpetrators of fraud stage auto accidents that result in innocent victims losing their lives, driving companies losing their business, and inappropriate medical treatments being performed on defenseless victims.
  • Those who fraudulently falsify insurance claims most often target vulnerable groups such as the elderly, immigrants, and small businesses.

Those who commit auto insurance fraud can range anywhere from first-time opportunists to criminal organized rings. These criminals steal millions of dollars from insurance companies and consumers as their actions inflate the cost of services for ordinary citizens. Auto insurance fraud is the most widespread theft of all insurance claim frauds. If a person is convicted of auto insurance fraud, they can be punished with up to five years in state prison and a $50,000 fine.

Those who commit auto insurance fraud can range anywhere from first-time opportunists to criminal organized rings. These criminals steal millions of dollars from insurance companies and consumers as their actions inflate the cost of services for ordinary citizens. Auto insurance fraud is the most widespread theft of all insurance claim frauds. If a person is convicted of auto insurance fraud, they can be punished with up to five years in state prison and a $50,000 fine.

Contact A Criminal Defense Attorney If Charged with Auto Insurance Fraud

If you or someone you know finds themselves under investigation for insurance application fraud, fraudulent marketing of insurance products, or filing false claims, you need to speak with a criminal defense attorney. You need someone on your side who understands the insurance industry as well as the criminal legal system. These are serious charges that can damage your reputation, cause you enormous financial loss, and if convicted send you to prison. Protect yourself, your business, and your future by having experienced legal counsel working with you.

Finding an Experienced Auto Insurance Fraud Lawyer Near Me

If you or someone you know has been charged with auto insurance fraud call 818-484-1100 to speak with a representative at Leah Legal. Leah Legal has the knowledge and experience you will need to fight the charge of auto insurance fraud. Insurance companies have a strong legal counsel on their side, and you deserve the same.

You need someone who will fight for your legal rights and help you get the charges reduced or dismissed altogether. California prosecutors work hard to prosecute those charged with auto insurance fraud, and you will need an experienced defense team who understands federal insurance and fraud defense. You need the Leah Legal criminal defense team working with you. Check through criminal attorney website to discover all the legal services we have available to help you get through any criminal legal process.