In Colorado, attempting to defraud the insurance company is a serious criminal offense. Making misrepresentations in an insurance application may be a misdemeanor. However, filing a fraudulent claim may be a felony. Under C.R.S. 8-5-211, the penalties for felony insurance fraud include up to 3 years in prison and fines of up to $100,000. In this article, our Colorado criminal defense lawyers will address:
- 1. What is insurance fraud in Colorado?
- 2. What are the penalties for insurance fraud?
- 3. What are defenses to Colorado insurance fraud charges?
- 4. Related Offenses
Insurance fraud involves filing false information or making false claims to the insurance company. This may occur when a policyholder presents a false claim for a loss or injury to get money from the insurance company. Insurance agents may also try and defraud the insurance company or policyholder.
A “claim”, as used in Colorado insurance fraud law, means a demand for money, property, or services pursuant to a contract of insurance. It also includes any documentation in support of an insurance claim, in written, oral, electronic, or digital form.1
Under Colorado law, a person commits the crime of insurance fraud when he or she, with the intent to defraud:
- Presents an application for an insurance policy which contains false information or withholds material information resulting in insurance coverage;
- Makes a claim for a loss or injury, which contains false material information or withholds material information;
- Is involved in a vehicular accident for the purpose of presenting a false or fraudulent insurance claim;
- Files a claim for the payment of a loss, where the loss or damage existed before insurance coverage unless the insurance policy permits the preexisting condition; or
- Makes an oral or written statement in support of a claim for payment, knowing the statement contains false information or withholds material information.
It is a criminal offense for an insurance agent, producer or insurer to do any of the following:
- With an intent to defraud, create or present a certificate of insurance containing false information to any person or entity; or
- Knowingly move, divert, or misappropriate premium funds belonging to an insurer from a producer's trust or other account without authorization or lawful justification.
Submitting an insurance application with false information or leaving out material information is a class 1 misdemeanor.2 Penalties include from 6 to 18 months in jail and a fine of up to $5,000.
All other types of insurance fraud, including filing a false claim or staging an accident, may result in felony criminal charges. Insurance fraud is a class 5 felony. The penalties for insurance fraud include 1 to 4 years in prison and a fine of up to $100,000. There is also a mandatory parole period of 2 years for insurance fraud.
If an insurance agent is charged with insurance fraud, they are likely to lose their state privilege to sell insurance in Colorado. If the agent is convicted, the state commissioner of insurance will revoke their license upon conviction.3
There are some defenses to criminal fraud charges in Colorado. Criminal intent is an element in most fraud charges. This means that a prosecutor must prove to the jury, beyond a reasonable doubt, that a person intended to commit fraud. Making an innocent mistake is not intentional fraud.
If you are charged with insurance fraud, some possible defenses include:
- You did not have the intent to defraud anyone;
- You applied for insurance with falsehoods, but did not get a policy;
- Any falsehoods on your insurance were genuine mistakes;
- The accident involved in the claim was genuine and not staged;
- As an insurance agent, you did not realize the insurance certificate was false;
- As an insurance agent, you had lawful authority to move the funds; or
- As an insurance agent, you did not knowingly misappropriate funds.
Insurance fraud may involve other related criminal offenses. This includes identity theft charges when another person's information was used to get any insurance benefits. It may also involve a health care fraud for claims involving medical treatment.
4.1. Health Care Fraud
Health care fraud is often covered by Colorado's insurance fraud statute. Health care fraud generally involves attempts to defraud health care companies. Healthcare fraud may also involve fraud against a state or federal agency providing health care or health care benefits.
In Colorado, it is a criminal offense to use another person's personal or financial identifying information to obtain anything of value. This includes using another person's identity to file a claim for insurance benefits. Identity theft in Colorado is a class 4 felony. Penalties for identity theft include 2 to 6 years in prison and a fine of up to $500,000.
Call us for help...
If you have been accused of insurance fraud or are being investigated by your insurance company, please contact us at Colorado Legal Defense Group. Our Colorado defense attorneys have many years of experience representing clients who have been charged with criminal fraud offenses. We are among the best Colorado criminal defense attorneys to call. Contact us today for a free consultation by phone or in-person or in our Denver law office.
- C. R. S. 18-5-211(7)
- C. R. S. 18-5-211(4)
- C. R. S. 18-5-211(5)