Auto insurance fraud is an attempt to defraud your insurer by amplifying or faking injuries, staging a car crash or theft, or deceiving about an accident. Any behavior you engage in to fraudulently obtain auto insurance benefits from your insurer or cause another person to be denied rightful benefits is auto fraud. The offense is a felony punishable by no more than five years in prison.
When facing car insurance fraud accusations or charges today, you must seek protection against these harsh penalties. At Chula Vista Criminal Attorney, we believe there is a possibility you are innocent. It could be you acted with zero criminal intent or are falsely accused, which is why we are here to evaluate the case and develop solid defense strategies to prevent a conviction.
Auto or Automobile Insurance Fraud Overview
For years, felonious claimants have been making illegitimate or phony lawsuits against their insurers to obtain car insurance benefits they are not lawfully entitled to. The increase in fraud cases has been the reason for the rise in the latest car insurance rates at inconceivable levels. Local government entities, law enforcement, and car insurance firms have partnered to fight false claims to restore balance at these levels. Multiple parties are involved while committing this offense, including police officers who doctor the accident report, medical professionals who exaggerate or fake injuries, and insurance adjusters.
The most common form of insurance fraud is staging accidents where you drive into a busy intersection or roundabout and slam brakes instantly. Slamming the brakes will cause the driver behind you to hit your car, causing a rear-end accident which is their fault because either they were driving closely or speeding. Additionally, you can fake whiplash injuries by colluding with medical professionals.
California Automobile insurance Fraud Overview
California has strict insurance fraud guidelines intended to prevent and deter falsified claims. Auto insurance fraud is one of the insurance fraud offenses we at the Chula Vista Criminal Attorney handle. The offense occurs when you submit a fraudulent, deliberate loss or amplified claim to your auto insurer for illegal benefits.
Typically, the offense does not appear as a severe one. It involves simple but illegal acts like a car repair shop exaggerating the cost of repairs to obtain benefits for undelivered services. Nevertheless, considering the hefty amounts lost by insurance firms in these fraudulent acts, automobile insurance fraud is a severe offense that is harshly punished. The violations are often charged as felonies, although sometimes they could be filed as a wobbler based on the case’s nature.
Automobile insurance fraud takes different forms, with each having a unique definition. Also, the punishment for the offense is based on the type of fraud committed.
Forms of Car or Automobile Insurance Fraud
The definition of automobile insurance fraud hinges on the Penal Code purported to have been breached. Discussed below are the different forms of the crime and how they occur:
Injuring or Abandoning a Car
As per California PEN 548, it is unlawful to:
- Destroy, harm, hide, or abandon any automobile insured against these incidents
- You engage in the conduct to prejudice your insurer
In this situation, commitment to prejudice means intentionally swindling or deceiving your policy carrier, a move the court understands could lead to financial loss to the insurer or damage to the company’s legal, property, and economic rights. In this context, you will still be convicted for automobile insurance fraud, harming, disposing of, abandoning, or destroying a vehicle even when the insurer does not incur economic or legal losses. Also, you will be guilty despite the car involved belonging to someone else.
For instance, John is experiencing financial problems and cannot pay household bills after a layoff. He owns a Porsche insured against damages. John destroys the vehicle by spraying it with paint, then files a claim to the police and the insurer, pretending the car has been vandalized. Nonetheless, after investigations, the police discovered John had destroyed the vehicle and blamed the damage on vandalism. John will face automobile insurance fraud charges because of misleading the insurer to obtain illegal insurance benefits.
Presenting a False Claim
Another way of committing insurance fraud is by presenting a false claim for obliteration or theft of a car. This offense is defined under PEN 550(a)(4). According to the statute, you engage in automobile insurance fraud when you:
- Knowingly falsify or fraudulently claim insurance benefits for theft, damage, or destruction of your car component or its content
- At the time of preparing or subscribing the paperwork, you were aware the claim was false
- And you planned on defrauding your insurer
You will be guilty of these charges if the court can demonstrate that you knew the claim was fraudulent when presenting it. Additionally, like PEN 548, whether the insurer suffers losses or not is not essential in proving guilt.
Deliberately Causing a Vehicle Accident
You will violate PEN 550(a)(3) when you:
- Take part or deliberately conspire to cause a vehicle crash
- Know the resolve for causing the collision is to defraud your insurer through a false claim
- Engage in the conduct willfully and file a suit with the desire to defraud
Also, you will be deemed to have engaged in automobile insurance fraud through knowingly causing a vehicle collision if:
- The crash was a direct, ordinary, and likely consequence of your conduct
- The collision could not have occurred without the input of your specific actions
Assume John's old vehicle has been demanding frequent maintenance that he cannot afford. After a lot of thinking, he realizes he can utilize the car to collect money from his insurer and buy another vehicle that does not require intensive repairs. So, John organizes with a friend Peter to help actualize his idea come true by deliberately causing a vehicle accident. Peter plays his part by removing his truck’s plate numbers, then drives to the streets and hits John’s old vehicle parked on the road, and flees the scene. Because the truck has no plate numbers, Peter cannot be tracked and charged with hit and run. Nonetheless, both individuals are guilty of PEN 550(a)(3) violation by deliberately causing a vehicle accident to commit automobile insurance fraud.
Filing Multiple Claims
As per California PEN 550(a)(2), you will be criminally liable for auto insurance fraud when you:
- Deliberately present at least two claims for a single loss or harm
- Knowingly file these multiple claims to obtain illegal benefits from your auto policy carriers
Multiple claims could also mean filing multiple claims with different insurers for the same loss. The prosecutor must establish you had personal knowledge and desire to commit the fraud crime.
According to PEN 550(b), it is illegal to do the following:
- Give an inscribed or verbal statement opposing an application for car insurance benefits, or as part of a car insurance money, or other insurance benefits, fully aware the information is false or has misleading material.
- Prepare a written or verbal statement partially or in obstruction to a claim for vehicle insurance benefits, fully aware that it comprises false or misleading information regarding the matter.
- Make verbal or written declarations to present to your car insurance carrier to obtain car insurance benefits by falsely stating you stay in California but live elsewhere.
Automobile Insurance Fraud Through Owners or Workers
It is not only insured car owners that could face insurance fraud charges. As per PEN 549, business owners, workers, or business representatives dealing with car insurance also breach California insurance laws in various ways. When these individuals breach these laws, they will face criminal liability and charges for automobile insurance fraud. Different ways these individuals breach the automobile insurance fraud statutes include:
- When a car insurance company lobbies, refers or receives business to or from any individual or entity fully aware that, or with thoughtless neglect, the individual or entity plans to commit automobile insurance fraud.
- When an automobile repair outlet offers a fee, it commits profit or other kinds of benefit or compensation to insurance adjusters, agents, or brokers for referring auto insurance policyholders to the outlet for repairs paid for by an insurance company.
For instance, Jane runs a car repair shop while her boyfriend is a car insurance adjuster. To bring more customers to her repair shop, Jane tells the boyfriend to refer policyholders within the locality to take their car repairs paid for by the insurer to her shop in exchange for 10% of the profit she derives from the business. Under the circumstances, Jane will be guilty of insurance fraud for sharing profit from insurance policyholders with an insurance adjuster.
Penalties for Automobile Insurance Fraud Conviction
The punishment or consequences for automobile insurance fraud hinges on the type of fraud offense you are charged with. The penalties are as follows:
PC 548 Destroying or Disposing of a Car
The crime of hiding, abandoning, or destroying a car insured for these occurrences to obtain undeserved insurance benefits is a felony. Upon conviction, the offense attracts the following penalties:
- Formal probation
- Twenty-four, thirty-six, or sixty months behind bars
- A court-imposed fine not exceeding $50,000
When you have a prior conviction for the offense, you will face a two-year sentence boost for every prior auto insurance fraud conviction.
False or Multiple Claims
Whether you have been convicted for false or multiple claims, you will face felony penalties. These are:
- Felony probation
- 24, 36, or 60 months incarceration
- $50,000 court fine or twice the fraud amount, either way
Also, you will face a two-year sentence boost for every prior felony sentence for PEN 548 and PC 550 violations. Additionally, you will not be eligible for probation or sentence suspension with an automobile insurance fraud prior conviction.
Deliberately Causing a Car Accident
When you willingly cause an accident to obtain insurance benefits illegally, you will face felony charges. Upon sentencing, the offense attracts the following punishment:
- Felony probation
- Two, three, or five years behind bars
- Monetary court fines not exceeding $50,000 or twice the fraud amount, either way
Additionally, you will face the following sentence enhancements:
- A two-year sentence boost for every prior sentence for automobile insurance fraud in PEN 550 or 548
- A five-year punishment enhancement for when you have at least two priors for automobile insurance fraud through deliberately causing a crash
- A sentence boost of two years for each individual, apart from your co-conspirator who obtained severe injuries from your unlawful actions.
- A possible sentence boost of at least three years when you cause great bodily injury (GBI) on someone else in the process of deliberately causing a car collision
False Statements or Declarations
The offense of making a false declaration to obtain insurance benefits you are ineligible for is a wobbler, meaning you can face misdemeanor or felony charges and sentences. The prosecutor’s decision is informed by your criminal past and the nature of the fraud. The punishment for a felony sentence is like those of presenting multiple claims.
Nevertheless, when the offense is filed as a misdemeanor, a conviction will result in the following penalties:
- Misdemeanor or informal probation
- No more than twelve months of county jail incarceration
- Monetary court fines no more than $10,000
PEN 549 Violation
When you seek, receive, or refer business to or from an individual or entity whose motive is to defraud an insurance company, you will face misdemeanor or felony penalties when sentenced. The penalties for a felony sentence are:
- Formal probation
- Sixteen, twenty-four, or thirty-six months imprisonment
- A court fine of $50,000 or twice the fraud amount, either way
If the offense is filed as a misdemeanor, a conviction will attract the following penalties:
- Informal probation
- A jail term of no more than twelve months
- Monetary court fines not exceeding $1,000
When you have at least two priors for breach of California insurance laws, you will face the felony consequences stated above.
Obtaining kickbacks or profit-sharing with a vehicle repair outlet is a distinct offense outlined under PEN 551. The section criminalizes acts by insurance brokers, adjusters, and agents of obtaining kickbacks from repair outlets for business by insurance customers. The punishment for this crime is arrived at by considering the automobile insurance fraud amount. When the amount the car repair outlet is promising as kickbacks is no more than $950, the crime is filed as a misdemeanor. A sentence for the charges attracts no more than half a year in jail or a court fine not exceeding $1,000.
On the other hand, when the kickbacks are at least $950, the crime is a wobbler. When the prosecutor prefers misdemeanor charges against you and the court finds you guilty, the punishment is a jail term not exceeding twelve months or a court fine of $1,000. A felony conviction attracts stricter penalties, including:
- A monetary court fine of $10,000
- Jail incarceration for 16, 24, or 36 months
Best Defenses for Automobile Insurance Fraud
As indicated earlier, automobile insurance fraud is a significant problem in the state and nationwide, explaining why prosecutors work day and night to investigate and bring to justice the perpetrators. A conviction for the crime also attracts perhaps the harshest penalties in the state. Sadly, as California works hard to combat this crime, some individuals are wrongfully accused of automobile insurance fraud and face convictions. Therefore, whether the insurance fraud allegations against you are true or false, do not hesitate to contact the Chula Vista Criminal Attorney to discuss your rights and options. Besides, we will help you mount the best possible legal defenses.
A conviction will reflect on your record when automobile insurance fraud is charged as a wobbler. Employers can see your felony or misdemeanor history when they run background checks. This will limit your chances of obtaining employment because you will be competing with people with no criminal past. Considering what is at stake, it is best to reach out to a criminal attorney immediately after you learn of an impending arrest or investigation for insurance fraud. A profound criminal defense legal team will prepare adequately and devise solid defenses to contest the charges. The common defense strategies your attorney will mount to ease or dismiss the charges are:
Lack of Desires to Defraud
For you to face a sentence for any fraud crime, the prosecutor must prove you had fraudulent intent. Without the element of malicious intent in your actions, a conviction is unlikely.
You can easily be charged with plans to defraud your car insurer because of an inconsiderate mistake that was flagged and informed to the police.
Luckily, the prosecutor assumes the burden of proof, and it is up to them to demonstrate that your actions to obtain money from your insurer unlawfully were willful. This form of fraud cannot occur by accident, meaning the prosecutor must prove beyond reasonable certainty you meaningfully prepared for the action. It will work in your favor because even a single doubt by the court that you planned on defrauding your insurer will not send you behind bars.
Sometimes, your defense attorney will investigate the case’s facts to determine whether the prosecutor has sufficient evidence to convict you. Due to the complicated proof of these cases, the prosecutor can sometimes be unable to prove all the elements of the case, especially when there is conflicting testimony or circumstantial evidence, creating room for your criminal attorney to assert to the court the lack of sufficient evidence. A reasonable attorney will find vagueness in the prosecutor’s arguments and use them as your defense to have the case dismissed.
Today, it is common to find people serving a sentence for offenses they never committed. You can be falsely accused of committing insurance fraud out of vengeance, anger, or mistrustfulness. Deprived of proper representation, you can end up behind bars, so you should talk to an attorney and evaluate the reasons that led to the charges. With a thorough evaluation of the case’s facts, an experienced defense attorney will explain to the court why the evidence submitted by the DA does not add up, resulting in charge dismissal.
Crimes Related to Automobile Insurance Fraud
The offenses related to auto insurance fraud are:
PEN 451 Arson
PC 451 defines arson as the malicious or willful starting of a fire. When you set your vehicle on fire while it is insured against fire to obtain insurance money from your policy carrier fraudulently, you will be guilty of arson. The offense is filed as a felony, and you face 16, 24, or 36 months in prison when sentenced. Additionally, PEN 451 violation in these conditions can attract court fines of up to $50,000 or twice the anticipated fraud money.
Health Care Fraud
Medical care fraud occurs when you bill your health insurance policy carrier for health services that you never obtained or amplified medical bills. Besides, fraud occurs when you submit several claims for the same health care services.
Whether your car accident was real or was deliberately caused, it could result in charges for both automobile insurance fraud and health insurance fraud when you present false or multiple claims for property loss and medical costs.
Filing a False Report for Car Theft
As per Vehicle Code 10501, you are criminally liable when you falsely report a car theft. The offense is frequently charged with or alongside auto insurance fraud if the car in question has been insured against theft.
You face these charges when you lie about your car being stolen or file a false car theft report with the desire to deceive your insurer to pay benefits.
VC 10501 violation is a misdemeanor whose conviction attracts a maximum of six months in jail. When you face severe auto insurance fraud charges, your attorney can negotiate during plea bargaining for a lesser offense like VC 10501 violation to face fewer penalties.
Find an Experienced Chula Vista Fraud Crimes Attorney Near Me
When you are charged with alleged auto insurance fraud, you want the Chula Vista Criminal Attorney in your corner. We will make it difficult for the prosecutor to prove you intended to commit the crime to have the charges dropped. Also, we understand that insurance firms have solid legal teams, and you deserve the same to protect your rights and freedom. Reach out to us today at 619-877-6894 to discuss your case and influence the court’s verdict in your favor.