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A Fraudulent Insurance Claim under California Penal Code 550 occurs when:
a policyholder makes a false insurance claim, or assists someone else in making a false claim on an insurance policy,
the person knew the claim was false or fraudulent, and
the act / false statement was committed with the intent to defraud.
Destruction of Insured Property claims under California Penal Code section 548 occur when:
an accused willfully injures, destroys, hides, abandons, or disposes of any insured property,
with the intent to defraud the insurer.
An insurance claim means that a person claims, makes, or presents a request for payment under a contract of insurance for a loss, injury, or healthcare benefit.
Intent to defraud occurs when someone intends to deceive another person to cause:
a loss of money, goods, or services, or something of value, OR
causes damage to a legal, financial, or property right.
Please note that federal insurance fraud cases can also be filed. In federal court, the crime of insurance fraud is usually prosecuted as mail fraud, criminal racketeering or other federal offenses.
Is Insurance Fraud a Felony or a Misdemeanor in California?
A fraudulent insurance claim in California can be either a felony or a misdemeanor depending on the type and amount of the claim. Actual loss is not needed so long as the suspect has committed an act and had the intent to commit the crime.
Insurance fraud is a specific intent crime. This means the district attorney’s office must prove that the person involved:
knowingly committed an act to defraud,
the act was completed.
For insurance fraud as a felony, the punishment is:
two, three, or five years jail,
a $50,000 fine or up to double the amount of the fraud.
If the claim involves health care benefits fraud over $950, the offense is a “wobbler,” punishable as either a felony or a misdemeanor. As a felony the punishment can be:
two, three, or five years jail,
a $50,000 fine or double the amount of the fraud.
As a misdemeanor the punishment could be up to:
one-year county jail,
a $10,000 fine.
If the claim involves health care benefits fraud less than $950, the offense is a misdemeanor punishable by:
six months county jail,
a $1,000 fine.
Destruction of Insured Property is a felony and punishable by:
two, three, or five years in jail, and
a $50,000 fine.
Sentence enhancements and additional punishment can be added if an accused has:
prior insurance fraud convictions, OR
if someone suffers serious bodily injury in vehicle fraud cases.
Please note that a person with one or more prior insurance fraud convictions is ineligible for probation.
Restitution must be ordered in every insurance fraud case.
What are Defenses to Insurance Fraud Charges in California?
Because insurance fraud is a specific intent crime, there are various defenses that can be raised by an experienced criminal defense attorney. These include:
mistake by the defendant or the adjusters / insurance agents,
no specific intent to defraud,
the statute of limitations has expired.
Another defense is that the law enforcement agency committed misconduct, such as coercing a confession.
Call our law firm for help. We offer free consultations in Los Angeles County and throughout the state of California. We can speak by phone or at one of our California law offices.
A former Los Angeles prosecutor, attorney Neil Shouse graduated with honors from UC Berkeley and Harvard Law School (and completed additional graduate studies at MIT). He has been featured on CNN, Good Morning America, Dr Phil, The Today Show and Court TV. Mr Shouse has been recognized by the National Trial Lawyers as one of the Top 100 Criminal and Top 100 Civil Attorneys.