Penalties for Insurance Fraud

Penalties for Insurance Fraud


Penalties for Insurance Fraud is a serious offense that has many negative consequences. Those who commit it can face prison time, fines and other penalties.

The amount of money that someone fraudulently seeks or receives is one factor in determining the penalty level. The other important factor is the severity of the crime.


As mentioned above, if you knowingly commit any form of insurance fraud and are caught, it could lead to serious criminal charges. Most states and the District of Columbia have laws that classify such offenses as felonies and punish them accordingly.

For example, California Penal Code (CPC) SS550(a) criminalizes submitting fraudulent insurance claims. This statute addresses all types of insurance fraud, including health care, auto, home, and commercial insurance.

The level of the crime is determined by the value of the loss. If you defraud the insurance company of $300 or less, you are guilty of a misdemeanor. A conviction for fraud of between $300 and $10,000 is a class E felony. However, if you commit the fraud in a more serious manner, you can be charged with a class C felony or even a class B felony. In any event, a felony conviction will almost certainly involve prison time and hefty fines. Moreover, you may be required to pay restitution and community service.


The misdemeanor offense of insurance fraud can be punished with up to a year in jail and fines. It may be possible to have the charges dropped if it can be proven that you did not act willfully, but that you committed an honest mistake or were coerced into providing false information.

Property insurance fraud involves false claims for a loss of property such as jewelry, cars, or home damage. For example, if a person sets fire to their own house and then fraudulently claims that the damage is from the flames, they have committed this crime.

Insurance fraud can also be committed by career criminals or organized crime groups, medical and legal professionals, and even your next-door neighbor. The penalties incurred by insurance fraud vary depending on the amount of money that was obtained illegally. The more money involved, the longer the maximum jail time or heftier the fines. It is important to get a federal lawyer as soon as you suspect that you are being investigated.


Insurance fraud is a serious civil offense that can be punished in the same way as other types of criminal theft. It can also lead to imprisonment and expensive fines.

Insurance crimes are committed by people from every social class. They include career criminals and organized crime groups, lawyers, medical professionals, car salespeople, and ordinary citizens. Some forms of the offense are even committed by people within the insurance industry itself. For example, our office has prosecuted insurance adjusters who inflated estimates in exchange for kickbacks.

Some common examples of insurance fraud include staging an accident or theft, faking death, destroying insured property to collect on an insurance claim, and other dishonest acts. If you are caught, you will face prison time, large fines, and other life-changing consequences. It is simply not worth it to lie to make money or gain an advantage over others. It is a major mistake that will wreck your life.

Statute of Limitations

When someone commits insurance fraud, prosecutors must use the statute of limitations as their guide. The statute of limitations is like a time clock that counts down toward the deadline by which a criminal charge must be filed.

Federal laws prohibit insurance fraud and the punishments for conviction often include fines, prison time and restitution. The criminal charges can involve any type of insurance from automobile to health or property insurance.

Insurance fraud is a crime in the United States and it costs society as a whole, not just insurance companies, because these fraudulent acts cause premiums to rise. In addition, these crimes deprive legitimate insurance customers of coverage they need and deserve.

In cases where you are facing felony insurance fraud charges, your lawyer may use the lack of knowledge defense and argue that you did not know that the statements or writings were false. Your attorney may also present a duress defense, such as when you were forced by a violent street criminal to complete the fraudulent insurance paperwork.