Millions of dollars are lost annually in California due to insurance fraud. Governments are also losing money in the same, which is why prosecutors and law enforcers are working day and night to ensure those making false or fraudulent claims to get a specific outcome from insurers are brought to justice. The most prevalent insurance fraud cases today are car insurance and health insurance. If investigators have reached out to you because of a fraudulent claim with an insurance company, The LA Criminal Defense Law Firm is here to help. We help defendants in these cases understand the meaning of insurance fraud, various types of insurance fraud, the legal defenses for the crime, and the penalties for assisting you to understand the need for hiring one of our insurance fraud attorneys.

California Insurance Fraud Laws

Insurance fraud is defined as making a false act or fraudulent insurance claim containing misleading information to get an outcome or obtain benefits from an insurance company. If you own a car that is insured against accidents and then fake an accident to get indemnified by your insurance policy carrier, then you are committing fraud. Things like exaggerating damages done to your car after an auto accident and staging auto theft to get insurance benefits are all deemed insurance fraud. 

Under California laws, insurance fraud is found in PC 548-550. The crime is a wobbler, and it is at the discretion of the prosecution to charge you with a misdemeanor or felony. Some of the insurance offenses one can be charged with include:

  1. Defrauding an Insurance Company

California PC 548 states that one commits a felony when they knowingly abandon, damage, destroy or dispose of an item or property that is under an insurance contract against loss or embezzlement, with the purpose to defraud an insurance company.  Fire is, however, excluded in this offense.

  1. Solicit Insurance Fraud

PC 549 prohibits individuals from soliciting, referring, or accepting business with individuals whom they are aware intend to make a false insurance claim. Depending on the degree of the act, the offense can be prosecuted as a misdemeanor or a felony.

  1. Presenting a Fraudulent Claim

PC 550 (a) makes it a crime to assist or plan the following:

  • Knowingly submit a fraudulent insurance claim for payment of loss and injury
  • Consciously present more than one claim to more than multiple insurers for the same damage with the intent to defraud
  • Consciously take part or cause a car crash or collision intended to defraud an insurer
  • Prepare or subscribe to writing with the intent to present it or allowing it to be submitted in supporting a fraudulent claim
  • Knowingly present or submit a fraudulent health care claim
  • Knowingly present multiple health care claims to defraud an insurer

So, if you abet, solicit, aid, or conspire to do any of the things listed above, then you have violated PC 550 (a). PC 550 (a) is a wobbler too.

  1. Prepare a false statement to support an insurance claim

The offense is codified under PC 555 (b), and it’s defined as intentionally assist or plan to:

  • Submit any fraudulent or written statement in support of an insurance claim
  • Conceal the occurrence of an event that affects an individual’s initial and continued right to insurance benefit, and
  • Make a false residence statement to acquire an insurance policy

The offense is also a wobbler.

Types of Insurance Fraud

Insurance fraud affects every sector of the economy from health care, home repairs, and renovations to the car industry. Due to that, false claims have been on the rise in the recent past. This has led to an increase in the cost of insurance and even other commodities. Below are some of the frequent types of insurance fraud:

  1. Auto Insurance Fraud

If you do something related to your car like staging a collision or getting it stolen so that you can gain money from your insurer fraudulently, you will be charged with auto insurance fraud. Most of the people who commit this offense are those liable for the accident and fear that they may not get compensated, those who want to stop paying insurance premiums or those who wish to obtain the money and use it on something else like buying the latest car model.

You will be charged with committing auto insurance fraud if you are involved in the following schemes:

Staged Car Accidents

Staged accidents occur if a driver slams on the breaks on a highway after spotting an expensive car behind him or her so that they can obtain money from the insurer of the other driver. Scammers will blame the driver who hit them from the back, although they are the ones who staged the accident. They might ask you to settle the matter without involving the authorities by asking for a certain amount of money, failure to which they report you to authorities claiming you are the driver at fault.

Stay away from staged accidents by following traffic rules to the letter and watch out for unusual traffic activities that might land you in problems with law enforcers.

Inflated Claims

It is a standard scheme that most insurance scammers use. It occurs when someone is involved in an accident with minor damages, but instead of reporting the losses, they claim more losses than the actual ones. The act leads to an increase in insurance cost, which is why if you are arrested for such an action, you can be charged with a felony.

False Vehicle Theft

Cars get stolen every day in California. Those whose cars have been taken and had an insurance contract against theft can claim money from the insurer. While some of these claimants are genuine, others can stage theft by abandoning their car and then reporting it has been stolen. People who do this are crime rings who pay for full coverage of a vehicle, stage a theft so that they can sell the parts and still have the insurer pay them money for the loss. Others who false car theft are people who are behind in payments.

Collision Repair Fraud

After being involved in a car crash, the auto shop you choose for repairs counts a lot in determining if you will be included in auto insurance fraud or not. Some repair shops will report new spare parts whereas they have used the old ones so that they can profit. A report like that might get you in trouble with being charged with auto insurance fraud.

  1. Worker’s Compensation Insurance Fraud

The purpose of worker’s compensation insurance is to cover workers who suffer work-induced injuries or harm by compensating them for lost income, pain, and suffering or medical expenses. The act of fraud is committed in these cases when a person:

  • Makes a false statement so that worker’s comp benefits can be awarded or denied
  • Encourages another party to make a false statement regarding worker’s compensation
  • Presents a health care report for an actual injury whereas the treatment for the damage wasn’t done by a professional medical practitioner
  • Submits multiple healthcare claims for different insurers for the same injury
  • Provides a medical care bill whereas you didn’t receive treatment for the damage, or
  • Claims he or she sustained the injury at work, whereas it is not work-related.

Because of the vast amounts involved in these cases, the offense is prosecuted as a felony, and when found guilty of the crime, a person can serve a very long sentence.

To protect yourself against such an offense, it is critical that you document and report everything about your injuries and medical treatment well and tell the truth. If you are an employer, you should receive a written document describing the injuries, check if the forms are well filled and get witness testimonies before submitting it to the insurance company.

  1. Health Care Insurance Fraud

The offense involves the use of fraudulent acts or false statements to obtain insurance benefits from a medical care facility or government agency. The majority of the victims of these insurance schemes are private insurers. Various government agencies are also being affected by the same.  If a person submits multiple claims for the same incident, overcharges the government or the insurer, or bills for a service that was not rendered, then he or she can be charged with health care insurance fraud.

Patients are rarely involved in fraudulent activities on the issue of health insurance. However, doctors and other medical practitioners are often involved in these fraudulent acts that attract felony charges and severe penalties.

As a patient, you can prevent this form of fraud by not sharing your Medicare number or other personal information with anyone that might impersonate you or steal your identity.

  1. Home Repair and Insurance Fraud

When engaging in any home repair project in an insured home, you must hire licensed contractors and those that are recognized by the state of California through registration. Check with the authorities to ensure the license is valid and up to date. When it comes to the massive project, get a contractor that has a construction supervisor license plus a home improvement contractor registration.

Remember that poor record-keeping is the main factor that contributes to insurance fraud. When running a project, therefore, make sure your contractor provides you with a precise written estimate, the scope of the project, plus all the permits required to conduct such a project. Doing so will keep you away from investigators and law enforcement agencies.

  1. Property and Casualty Fraud

The type of insurance fraud is committed by people applying for insurance, 3rd party claimants, policyholders, and people providing services to the claimant. The collective schemes involved in this type of fraud include planning car theft, arson, identity theft, staged auto theft, and worker’s compensation.

To protect yourself from this form of fraud, stay away from the door to door insurance agents, cheap insurance policies, and make sure you never sign a blank insurance form claim.

  1. General Liability Insurance Fraud

General liability insurance is no different from the worker’s compensation fraud. The policy's purpose is to cover guests or occupants of your building or premises but not employees. In the event a visitor in your home slips and falls or sustains injuries because your building is not up to standard, then you might have to compensate the person that was injured. If a building does not meet the right safety standards or lacks regular inspection, it is easy for someone to commit insurance fraud.

To prevent such occurrences, you should ensure that your premises are built to the right standards and regular inspection done to avoid any hazards.  Also, make safety your number one agenda and be vigilant of anything that might cause injuries.

Elements the Prosecution must Prove in Insurance Fraud Cases

The prosecution needs to prove beyond a reasonable doubt that you are guilty of a crime of fraud. Some of the features they are required to demonstrate include:

  • There was false or fraudulent submission
  • The invalid presentation was knowingly and intentionally made
  • The purpose of making the false presentation was to obtain insurance at a cheaper rate or premium, to acquire a benefit that is not due, or deny a benefit that is due, and
  • The fraudulent presentation was material since were it not for it, the parties involved would have known it’s incorrect, thus acting differently

Keep in mind that without a reliable criminal defense attorney, it might be tough to fight these charges if the prosecution proves these elements. Also, without legal representation, you might make mistakes such as altering, concealing, or destroying evidence, confess to the crime of insurance fraud or use false evidence to get out of the suspected crime. Such mistakes will strengthen the prosecution’s case, thus the need to avoid them and retain the services of an insurance fraud attorney.

Penalties for Insurance Fraud Conviction

If the prosecution succeeds in proving the above elements, you will be convicted of an insurance fraud offense. Also, since several claims, especially for auto theft, are false, your insurer will not just indemnify you without conducting thorough investigations to find out the truth. In case the defendant was involved in a fraudulent act to obtain insurance benefits, they will be charged with a wobbler offense.

If the prosecution prefers misdemeanor charges and the jury finds you guilty, you will be facing the following penalties:

  • Summary probation
  • A maximum of 180 days or 365 days in jail
  • A fine not exceeding dollars ten thousand or
  • Restitution

If the preferred charge by the prosecution is a felony when found guilty, you are likely to face the following penalties:

  • Formal probation
  • A sentence of typically three years in state prison
  • An additional twenty-four months jail term for every insurance fraud prior conviction, or
  • Up to dollars fifty thousand or double the amount you defrauded or tried to defraud the insurer

Legal Defenses for Insurance Fraud Charges

Defending an insurance fraud crime is not easy. However, you should not give up and wait to face the above consequences and penalties. With a good lawyer, there are chances of winning the case. Keep in mind the prosecution in these cases might rely on circumstantial evidence or direct evidence to show that you committed a fraudulent act to get a specific outcome from your insurance company, thus the need for an attorney.

An excellent criminal defense attorney will listen to your side of the story and analyze every angle of the case to find some of the valid defense he or she can use to fight the charges. Remember to be honest with your attorney and let them know everything about what happened. Some of the adequate legal arguments that can be used are:

Lack of Knowledge of Falsity

Lack of knowledge works very well when defending a fraud charge. One of the elements the prosecution uses to prove you are guilty is knowing that you were making a false statement or writing. If you didn’t know that the report was wrong or untrue, then you haven’t committed any crime. Your criminal defense attorney can argue that what you wrote on the insurance form was information given to you by another person, which you had no facts to establish if it was true or false.

Lack of Intent

When proving guilt, the prosecution verifies that you had the intention to defraud the insurer by making a false presentation. So, you can only be guilty of insurance fraud if you intended to present or say something untrue. If the defendant was involved in an accident and was filing an electronic insurance claim form, the attorney can argue that the defendant clicked the submit button while trying to save the claim file. It is an indicator that the false presentation was not done intentionally.


A reasonable attorney can also argue that you were forced to commit a fraudulent act so that someone else can obtain an inevitable outcome from their insurance company through threats. If a defendant is facing charges for taking part in staging an auto accident, an attorney can argue that the defendant was forced by a gang or someone by use of threats to stage the accident.  

Mistaken Identity

Mistaken identity can apply as a solid defense. The reason being, in insurance fraud, you will rarely find witnesses. If there are no witnesses to testify that you committed the fraud, it means someone else could have filed the insurance forms and then signed your name and signature on the forms on your behalf. Without direct evidence linking you to the fraud, you can quickly get the case dismissed. But if there is a video, witness, or any discovery that can connect you directly to the fraud, then it becomes almost impossible to fight these charges.


At times law enforcers might pressure the defendant to present a false claim to an insurer, especially when the law enforcement agencies suspect fraudulent activities in an insurance company but have no other way of investigating the company. If you were pushed to commit an act of fraud by a law enforcer, an act that you were otherwise not inclined to do, then you can argue entrapment.

Ambiguous Statement

Some statements might be interpreted differently by people. It means you can be charged with insurance fraud for a true statement that you made, but the insurer or investigators misinterpreted it. By arguing that the statement was ambiguous and thus open to misinterpretation, then you will have a strong defense.

Withdrawal for Conspiracy

When the prosecution purports that the defendant conspired with others to commit an insurance fraud offense, an attorney can argue that the defendant withdrew from the plot at the initial stages or before the act of fraud was committed.

If any of these legal defenses apply to your case, then all you need is the right attorney on your side, and you don’t have to worry about jail or fines because you will have a solid defense.

Legal Motions that can help dismiss your Insurance Fraud Charge

If a defendant and the attorney feel like the prosecution or the investigators presented illegal evidence in court or didn’t adhere to the law, they can file various motions. The motions are a request to the judge to take action that will affect the case. Some of the legal motions that can be filed include:

  • Motion to dismiss the case
  • Motion to suppress illegal evidence, or
  • Motion to prevent specific prosecution testimony

All these motions can apply in insurance fraud charges and can get the charges reduced, or the case dismissed.

Find an Los Angeles Insurance Fraud Attorney near Me

Insurance fraud is a severe crime, and the consequences of a conviction include hefty fines, restitution, jail time, and probation. If you are charged with this offense, reach out to The LA Criminal Defense Law Firm at 310-935-1675 to speak to one of our experienced attorneys. We will commit our resources and energy in your case to ensure you get a favorable outcome at the end of the case.