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New Jersey Insurance Fraud Laws

Definition of Insurance Fraud

In New Jersey, insurance fraud can occur in numerous different ways. Generally an insurance fraud offense occurs when someone knowingly omits a material fact or makes a false or misleading statement to an insurance company. In New Jersey, insurance fraud is charged as a third degree felony.

Multiple instances of insurance fraud can be a second degree offense with even stricter penalties. When a claim is filed, any information that is provided in the application itself or thereafter that misleads the insurance company in order to acquire insurance money or acquire a renewal in policy is considered fraud. including:

  • Automobile Accidents
  • Automobile Insurance
  • Health Care Claims
  • Insurance Applications
  • Medicaid
  • Disability Benefits
  • Unemployment Insurance
  • Workers' Compensation

Who Enforces and Prosecutes Insurance Fraud Laws?

New Jersey state and local prosecutors handle insurance fraud cases under the state's penal laws. The Feds can also prosecute insurance fraud under a number of criminal statutes including as "mail fraud," "criminal racketeering," or other federal offenses.

How Do I File a Complaint Against an Insurance Company?

Contact the New Jersey Department of Banking and Insurance (NJDOBI) for complaints against insurance carriers and discount health plan providers,

The following table highlights the main provisions of New Jersey's Insurance Fraud laws.

See also Association of Certified Fraud Examiners, Fraud, Fraud and Financial Crimes, and Arson.

Code Section

N.J.S.A. 2C:21-4.6 et seq. and Health Care Claims Fraud Act (PDF).

What is Prohibited Knowingly lying about, or concealing an important fact in connection with a insurance claim or payment made under an insurance policy. Applies to issuing fake insurance policies and rate-fixing. Also includes conspiring to do any of the above.

Possible penalties include:

  • Health Care Claims Fraud: fines of up to $150,000 or five times the value of the claims. Jail time of up 3-5 years. For a medical professional committing fraud, the jail time can be 5-10 years in jail.C
  • Insurance/False Insurance Card: $10,000 fine and up to 18 months in jail.
  • Insurance Application Fraud: $5000 fine.
  • Unemployment Insurance Fraud: Considered a theft crime. Penalties correspond to the value of the theft.
  • Disability Benefits Fraud: Also considered theft.
  • Workers Compensation Insurance Fraud: up to a $10,000 fine and 18 months in jail.

Possible civil penalties including fines, revocation of business license, etch.

Who Can Be Prosecuted Consumers, Providers (such a doctor and auto repair shop), and Insurance Companies, Adjusters and others
Types of Insurance Fraud Automobile Repair and Accidents, Medical/Health care, Life, Worker's Compensation, Fire, Property (Repairs and Property Claims Adjustments).

Insurance Fraud Detection Reward Program

Individuals may apply for a reward for any tip that leads to an arrest and conviction. A reward is only payable if the tip results in a criminal conviction and is paid only for tips leading to new investigations, not cases already under investigation. Reward applications must be submitted within 30 days of the date which the applicant initially provided the information to be eligible for a reward.

Examples of Insurance Fraud
  • False Worker’s Compensation claims
  • False or misleading property loss claims
  • Arson for profit
  • Staged car accidents for insurance settlements
  • Health care claims fraud
  • Falsely obtaining unemployment insurance benefits when you are working
  • Small accidents in collecting an insurance check without fixing vehicle
  • Home repair fraud
  • Stolen car scams
  • Unnecessary medical procedures

Enforcement Agencies

If you feel you have been victimized by insurance fraud, here is some contact information that can help you:

Because insurance fraud laws can sometimes get complicated, it may also be a good idea to consult an experienced criminal defense lawyer if you have questions about your specific situation.

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