Making a false insurance claim is a crime. Fraud occurs when making false claims or misrepresentations to the insurance company for financial gain. Insurance fraud can involve a single claim for benefits or be part of a larger criminal enterprise. The insurance companies are aggressive in pursuing fraud cases, and the courts are often on their side to prosecute any criminal offenses.
The insurance company may deny a claim based on perceived fraud, costing you money. However, if the insurance company reports fraud to the police, it can lead to state or federal charges. After an arrest for insurance fraud, contact an experienced criminal defense attorney for legal advice.
Insurance fraud doesn't just include fraudulent claims by policyholders. It can also involve the insurance company, healthcare providers, business owners, or others. Insurance fraud can happen at any point, from your application for coverage to making claims for compensation.
Many people think of insurance fraud as a victimless crime. The insurance companies take millions of dollars in premiums and put up a fight anytime someone files a claim. Regardless of how you feel about the insurance companies, anything that is considered fraud is still a criminal offense.
Insurance is involved in so many parts of our lives. This includes individual insurance policies and business insurance. Some of the common examples of insurance fraud can involve:
- Auto insurance
- Health insurance
- Life insurance
- Home insurance
- Workers' compensation
- Commercial property insurance
- Renter's insurance
Some typical examples of insurance fraud committed by individuals involve attempts to get money on a claim or to collect from another person's insurance company. This includes bodily injury claims for automobile accidents or personal injury claims against a property owner. Other scenarios may include:
- Providing false information on an insurance application
- Making a workers' compensation claim for an injury that happened at home
- Making an insurance claim for loss or injury with fraudulent information
- Intentionally causing damage or loss to make an insurance claim
Insurance fraud can also be committed by doctors or health care professionals. With so much bureaucracy and paperwork involved in health care benefits, an increased claim or billing for medical service never performed can easily go undetected.
When doctors are investigated for insurance fraud, there may be claims that the fraud went back years and included hundreds of patients. Billing for service fraud schemes may involve private health insurance, auto insurance, and government providers like Medicare.
An insurance fraud conviction can lead to harsh punishments. The insurance companies lobby lawmakers to make sure fraud against these companies is taken very seriously. The criminal penalties for fraud depend on the individual situation, based on factors including:
- Amount of money involved
- Type of fraud committed
- The extent of the fraud
- How many people were involved in the fraud
- Victims of fraud
- Criminal history
Insurance fraud can be a misdemeanor or felony. As a misdemeanor, fraud is generally punishable by a fine, restitution, and jail time for up to a year. As a felony, a conviction could result in a lengthy prison stay. Felony offenses also have collateral consequences that could limit your ability to find a job, own a firearm, or serve on a jury.
There are common defense strategies to criminal insurance fraud charges. Talk to your lawyer about the defense options for your case, which may include:
- An unintentional mistake on a claim or insurance form
- Lack of evidence
- Another person committed the fraud in your name
Many insurance fraud cases begin with an investigation by the insurance company. The insurer looks for red flags or suspicious claims that may involve potential fraud. Red flags and fraud warnings may involve you:
- Making a claim just after getting insurance coverage
- Asking hypothetical questions about claims before filing a similar claim
- Being deep in debt
- Having a history of similar claims
- Pushing for a quick settlement
Unfortunately, insurance companies may even look into legitimate losses that actually occurred. They may deny these claims and report them as fraud.
As soon as you learn about an insurance investigation, consider talking to a lawyer. Plenty of innocent people have gone to jail after being accused of insurance fraud. Attorneys with experience in insurance fraud defense understand the complex nature of insurance fraud charges and will know how to protect your rights and build a strong defense.