New York Insurance Fraud Laws

Created by FindLaw's team of legal writers and editors | Last reviewed January 17, 2018

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Okay, so maybe you didn't actually break your leg and miss a week of work after slipping and falling on a puddle of salad dressing at the grocery store; but that insurance settlement sure was nice! However, the truth has finally caught up to you and you have been arrested and charged with insurance fraud. You've never considered yourself a criminal, but it just seemed too easy. And since your settlement was for $5,000, you'll spend at least one year in jail if convicted, according to New York law.

Insurance fraud -- whether you're providing misleading information about an accident or filing a false life insurance claim -- is a serious crime in New York and elsewhere. After all, insurance markets would collapse overnight if we all decided to file false claims or otherwise defraud our insurers. Generally speaking, insurance fraud occurs when an individual knowingly and with intent to defraud an insurer:

  • Passes off materially false information; or
  • Attempts to conceal information in an attempt to obscure the truth.

While simple insurance fraud (valued at less than $1,000) is a class A misdemeanor, more severe cases are charged as felonies.

New York Insurance Fraud Laws at a Glance

The following chart lists the definitions of both general insurance fraud and life settlement fraud, classifications of the crimes, and penalties.

Statutes

 Penal Code Section 176.00, et seq.

Definition of General Insurance Fraud

A fraudulent insurance act is committed by any person who, knowingly and with intent to defraud presents, causes to be presented, or prepares with knowledge or belief that it will be presented to or by an insurer, self insurer, or purported insurer, or purported self insurer, or any agent thereof:

1. Any written statement pertaining to a commercial insurance policy or a claim for payment that he or she knows to:

  • Contain materially false information concerning any fact material thereto; or
  • Conceal, for the purpose of misleading , information concerning any fact material thereto; or

2. Any written statement or other physical evidence pertaining to a health insurance policy that he or she knows to:

  • Contain materially false information concerning any material fact thereto; or
  • Conceal, for the purpose of misleading , information concerning any fact material thereto.

Definition of Life Settlement Fraud

A fraudulent life settlement act is committed by any person who, knowingly and with intent to defraud , presents, causes to be presented, or prepares with knowledge or belief that it will be presented to, or by, a life settlement provider, a claim for payment or other benefit under a life settlement contract, which the person knows to:

  • Contain materially false information concerning any material fact thereto; or
  • Conceal, for the purpose of misleading, information concerning any fact material thereto.

Crime Classifications

General Insurance Fraud

  • Fifth Degree: Commission of a fraudulent insurance act; class A misdemeanor.
  • Fourth Degree: Involving the taking or attempted taking of property valued in excess of $1,000; class E felony.
  • Third Degree: Involving the taking or attempted taking of property valued in excess of $3,000; class D felony.
  • Second Degree: Involving the taking or attempted taking of property valued in excess of $50,000; class C felony.
  • First Degree: Involving the taking or attempted taking of property valued in excess of $1 million; class B felony.
  • Aggravated Insurance Fraud in the Fourth Degree: When the perpetrator commits insurance fraud and has been previously committed of a similar crime within the preceding 5 years; class D felony.

Life Settlement Fraud

  • Fifth Degree: Commission of fraudulent life settlement act; class A misdemeanor.
  • Fourth Degree: Involving the taking or attempted taking of property valued in excess of $25,000; class E felony.
  • Third Degree: Involving the taking or attempted taking of property valued in excess of $50,000; class D felony.
  • Second Degree: Involving the taking or attempted taking of property valued in excess of $100,000; class C felony.
  • Second Degree: Involving the taking or attempted taking of property valued in excess of $1 million; class B felony.
  • Aggravated Life Settlement Fraud: When the perpetrator commits life settlement fraud and has been previously committed of a similar crime within the preceding 5 years; class D felony.

Penalties
  • Class A Misdemeanor: Up to 1 year in jail, up to $1,000 in fines
  • Class E Felony: Up to 4 years in prison (min. 1 yr.)
  • Class D Felony: Up to 7 years in prison (min. 1 yr.)
  • Class C Felony: Up to 15 years in prison (min. 1 yr.)
  • Class B Felony: Up to 25 years in prison (min. between 1 yr. and one-third of maximum sentence)

Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

Research the Law

Get Legal Help with Your New York Insurance Fraud Case

Insurance fraud is a serious crime that can land you in prison for up to 25 years. If you've been charged with insurance fraud or life settlement fraud, you will most certainly benefit from legal representation. Find a New York criminal defense attorney near you to learn more.

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