Insurance fraud takes many forms. However, among the most common types of insurance fraud prosecuted in California is automobile insurance fraud. Auto insurance fraud is a criminal offense under California Penal Codes PC 548-551. These charges may be prosecuted as a felony resulting in time behind bars.
California Auto Insurance Fraud
In order to drive on California roads, drivers have to have valid automobile insurance. Depending on the type of coverage and limits, insurance is supposed to pay for the vehicle damage or injuries to another person resulting from an accident caused by the other driver.
Anyone who has ever been involved in an accident knows how expensive repairs can be, even for a minor fender bender. If anyone was injured in the accident, the cost can exceed tens of thousands of dollars in medical bills. With so much money involved, automobile insurance can be an attractive way for individuals to make money by defrauding the insurance companies or other drivers.
Types of Auto Insurance Fraud
The California criminal code enumerates a number of types of automobile insurance fraud, including:
- Intentionally damaging a vehicle;
- Abandoning a vehicle;
- Filing fraudulent insurance claims;
- Fraudulently filing multiple claims;
- Causing an accident for the purpose of insurance fraud;
- Making false statements as part of an insurance claim; and
- Businesses involved in auto insurance fraud.
Criminal Penalties
The penalties involved for insurance fraud may depend on the type of fraud, the amount of fraud involved, whether there was a pattern of the practice, and if anyone was injured in the commission of the crime. Most convictions for insurance fraud result in some amount of jail time, payback of fraudulently gained money, fines, and fees. It will also result in a criminal record that could carry additional repercussions into the future.
Destruction or Abandonment of Insured Vehicle PC 548
Any person who willfully damages, destroys, or abandons any property which is insured against loss or damage is punishable by imprisonment of up to 5 years and a fine of up to $50,000. A second or subsequent conviction carries a two-year enhancement. California PC 548.
These cases generally involve individuals who intentionally insure a car against damage or theft. The vehicle owner then works with a vehicle theft ring, chop shop, or others who may help steal or strip the car. The owner then files a claim for damages or loss of the vehicle, profiting both from the insurance company payout and from participation in the theft or damage to the vehicle.
Doing Business Involving Insurance Fraud PC 549
Any company, partnership, association, or person who solicits, accepts, or refers any business to or from an individual that they know intends to participate in insurance fraud is punishable by up to three years in prison and a fine of up to $50,000, or double the amount of the fraud, whichever is greater. California PC 549.
Automobile Insurance Fraud PC 550
It is unlawful to commit any of the following types of fraud, or to solicit or conspire with anyone to do the following:
- Present a false or fraudulent claim for payment of a loss or injury under an insurance contract;
- Present multiple insurance claims for the same loss or injury;
- Participate in a car accident for the purpose of filing a false claim; or
- Support a false or fraudulent claim.
Anyone who violates these laws is guilty of a felony punishable by up to 5 years in prison, and a fine of up to $50,000, or double the amount of the fraud, whichever is greater. California PC 550.
Insurance Fraud ‘Kickbacks' PC 551
It is unlawful for any car repair shop, dealer, contractor, or employee of an auto repair shop to offer any agent or broker a profit, commission, or other consideration, also known as a ‘kickback,' for referring the insured to an automotive repair dealer. Where the amount exceeds $950, the offense is punishable by up to 3 years in prison, and a fine of up to $10,000.
How Insurance Fraud is Reported
There are a number of possible ‘red flags' that alert insurance companies to possible fraud. Increasingly, information is shared and gathered in databases that allow insurance investigators to quickly access insurance record, cross reference historical insurance records and claims with the suspicious claims. Multiple claims by the same policyholder, losses occurring within a short time of insurance coverage taking effect, increased policies to cover theft or damage shortly before the loss occurs, or accidents occurring between the same individuals may alert agents to a suspicious claim.
Additionally, when individuals with suspicious claims routinely visit the same doctor, chiropractor, and auto body shop, the insurance company may be looking for a possible insurance fraud ring.
Auto Insurance Fraud Defenses
Unfortunately, many innocent people are accused of automobile insurance fraud and do not know where to turn. Not only are they denied compensation for their car accident injuries and repair, they are also threatened with jail time. In some cases, the threat of going to jail is enough to make an innocent person plead guilty in order to receive probation. However, your attorney will fight to keep your record clean and keep you out of jail.
There are a number of defenses available to automobile insurance fraud charges. In many cases, the prosecutor does not have enough evidence to prove their case beyond a reasonable doubt. This is often the reason why they seek a plea deal. An experienced criminal defense attorney can highlight the lack of evidence and break down the prosecutor's case for the jury to find the defendant not guilty.
Experienced Criminal Defense Attorney Representation
Lynn Gorelick has more than 30 years of criminal defense experience and understands the penalties involved with insurance fraud, including felony fraud charges. She understands how to approach the individual facts of each case for the greatest chance of success, keeping her clients out of jail with a clean record. Whether you are arrested in Oakland, Richmond or anywhere else in Contra Costa or Alameda Counties, contact Lynn Gorelick understands you do not have to plead guilty just because you were arrested.
