{"id":352087,"date":"2023-08-23T11:40:40","date_gmt":"2023-08-23T16:40:40","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/criminal\/criminal-charges\/insurance-fraud.html"},"modified":"2025-06-02T11:40:00","modified_gmt":"2025-06-02T16:40:00","slug":"insurance-fraud","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/criminal\/criminal-charges\/insurance-fraud.html","title":{"rendered":"Insurance Fraud"},"content":{"rendered":"\n
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Insurance Fraud<\/h1>\n
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\n By Eric Harvey, J.D.<\/a> | Legally reviewed by Melissa Bender, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

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Insurance fraud involves lying to an insurance provider about a claim. These lies can range from overvaluing the amount of a real claim to filing a completely fake claim. This type of fraud can lead to criminal penalties like jail time.<\/p>\n\n <\/div>\n\n

A typical insurance fraud case involves an insured individual or entity filing a false or exaggerated insurance claim. The goal of this fraud is to get compensation for losses they did not actually suffer.<\/p>\r\n

Insurance companies have an incentive to deny claims. They often scrutinize the circumstances of a claim to avoid any unnecessary payouts. In some cases, they may go as far as reporting a suspicious claimant to the police.<\/p>\r\n

Below, learn about the different types of insurance fraud, the elements of the crime, and the potential criminal penalties. You might also want to discuss defense options with a local attorney<\/a> if your insurer accuses you of a false claim. <\/p>\r\n

What Is Insurance Fraud: A Legal Definition<\/h2>\r\n

Fraud<\/a> is a crime of deception for financial gain. There are many ways to commit fraud. Insurance fraud is just one way, but it is of growing concern because of pressure from the insurance industry. Forty-eight states<\/a> now have specific criminal laws for insurance crime.<\/p>\r\n

According to Texas law, insurance fraud is the act of preparing a false or misleading statement to present an insurer in support of either a claim or application for a policy. Misleading statements involve misrepresentation of fact. This is an essential element of the crime.<\/p>\r\n

Insurance fraud could involve any kind of insurance. It could involve automobile insurance, for example. It might also involve defrauding health care providers. In that case, it would be treated as health insurance fraud. In other contexts, it could involve property insurance. <\/p>\r\n

Under such circumstances, someone might fake accidental property damage and file a false insurance claim. Regardless of the type of insurance involved, the offense will always involve the use of false information or the use of false insurance claims.<\/p>\r\n

Depending on the jurisdiction where you’re located or the nature of the offense, insurance fraud can result in either a felony or misdemeanor conviction. In Illinois<\/a> and Michigan<\/a>, for example, such a conviction can be either one of these two offense types. Under the California penal code<\/a>, however, insurance fraud is typically treated as a felony.<\/p>\r\n

Who Commits Insurance Fraud<\/h2>\r\n

Insurance fraud is pervasive and committed by individuals from all walks of life. Police have arrested doctors, lawyers, chiropractors, car salesmen, and people in positions of trust. Some types of insurance fraud crimes are committed by people within the insurance industry itself. Insurance agents have been arrested for premium diversion. Adjusters have been arrested for conspiring to commit insurance fraud by inflating estimates and getting a kickback.<\/p>\r\n

Insurance fraud is often a solitary crime. But it can also be committed by several people conspiring together in a business. For example, members of a doctor’s office might work together to commit Medicare fraud. In some high-profile cases, fraud schemes and scams may be perpetrated by organized crime rings.<\/p>\r\n

According to the Coalition Against Insurance Fraud<\/a>, insurance fraud costs American consumers more than $80 billion a year in higher premiums. This does not include the $60 billion a year in Medicare fraud that steals benefits from those programs.<\/p>\r\n

Fraudulent Acts Related to Insurance<\/h2>\r\n

There are three basic varieties of insurance fraud:<\/p>\r\n