Auto Insurance Fraud

While fraud is a non-violent crime, a conviction can attract harsh punishments, including a hefty fine and a lengthy imprisonment term which can affect many aspects of your life, including your career. One of the most frequent and heavily punished fraud offenses that we handle at Darwish Law involves auto insurance fraud. If you’re in police custody for allegedly committing auto or car insurance fraud, our experienced attorneys would be proud to do what they do best in your case.

Laws surrounding these types of cases can be confusing and complex, but our Santa Ana attorneys will not stop until they achieve the best possible outcome from your case.

Understanding Auto/Car Insurance Fraud Law 

Generally, fraud occurs when you willfully and intentionally lie or use fraudulent documents to obtain an undeserved or unfair benefit for yourself and cause loss to another individual or business. People mainly participate in fraudulent activities for financial gain or to avoid criminal liability, but few are aware of the potential consequences of participating in these unlawful actions.

Like other insurance frauds, auto insurance fraud involves fraudulent activities concerning auto insurance and vehicles. You commit auto insurance fraud when you purposely do a deceitful act to obtain unfair compensation from your car insurer. 

Auto insurance fraud is not an uncommon offense, and it makes auto insurance companies incur millions of losses every year through various fraudulent acts. Because of the increasing number of auto insurance fraud cases, insurance companies fund law enforcement officers and prosecutors to go after every individual alleged of violating any auto insurance law.

Claiming that you had a car accident while you didn't or increasing your insurance compensation claim cost are common ways people commit auto insurance fraud. There are several forms of auto insurance fraud punishable under the law, and each of them has its unique definition and facts.

Most forms of auto insurance fraud will attract felony charges, although there are also some other instances where the prosecutor will file your case as a wobbler. If the prosecutor treats your case as a wobbler, it means your case is punishable as either a felony or misdemeanor, depending on its unique facts and circumstances. 

Considering the impact of the possible punishments you could be subject to after a conviction for violating any auto insurance fraud law, you should do all you can to fight the fraudulent allegations against you.

Any accusation of violating an auto insurance fraud law can leave you fighting your insurance provider and the prosecutor simultaneously with both your freedom and money on the line. To increase the chances of winning the auto insurance fraud case against you, you should retain the services of a reliable defense attorney as soon as you can. 

Having legal counsel and representation in your corner can help you manage threats from your insurer effectively and will also increase your chances of achieving a desirable outcome from the case against you.

Forms of Auto Insurance Fraud Crimes Chargeable and Punishable Under the Law

To understand auto insurance fraud law better, we will briefly discuss various forms of auto insurance fraud that are chargeable and punishable under the law. Below is an overview of various forms of auto/vehicle insurance fraud:

Abandoning or Damaging Vehicle 

Under Penal Code 548, it is unlawful to damage, abandon, hide or dispose of your insured vehicle with the criminal intent to defraud your auto insurance provider to pay you unfair benefits or proceeds. You cannot be guilty of violating PC 548 if the prosecutor cannot prove to the jury beyond a reasonable doubt that:

  • The car or vehicle in question had insurance coverage against loss or damage.
  • At the time of your alleged fraudulent acts like damaging or hiding the vehicle in question, you had criminal intent to defraud your auto insurance provider.

For the sake of PC 548, having the "intent to defraud" means you had the intention to deceive your auto insurance provider by making them incur financial losses. The prosecutor could secure a conviction against you for violating PC 548 even if the auto insurance company did not incur any financial loss due to your fraudulent actions.

Similarly, even if the vehicle in question was not yours, the prosecutor can still charge you with auto/car insurance fraud for committing or participating in any of the above fraudulent acts. That would be possible if he/she can prove to the jury that you had the intent to defraud your insurer during the commission of the alleged fraudulent acts. 

A violation of PC 548 is typically a felony offense which is punishable by:

  • A fine amounting to up to $50,000
  • Incarceration term in the county jail for a maximum of five years

In some cases, the judge may order felony probation in place of the incarceration term, which is a less severe sentence than spending time in the county jail. Remember, if you have a past felony conviction record of the same offense, the judge might order a two-year sentence enhancement for each past conviction record.

However, a reliable criminal defense attorney might be able to counter auto insurance charges against you by raising the legal defense arguments below.

  • False accusations
  • There wasn’t an apparent probable cause for your arrest or detention
  • You didn't have the criminal intent to defraud

Fraudulent Claims

PC 550 covers and defines various forms or types of auto/car insurance fraud that are chargeable and punishable under the law. One of these offenses involves presenting a fraudulent claim to your auto insurance provider seeking compensation for losses resulting from your vehicle's destruction, damage, or theft.

Like other insurance fraud offenses, the prosecutor with the jurisdiction over your case carries the evidentiary burden to demonstrate to the judge or jury that you had the intent to defraud your insurer and you were aware that your claim was fraudulent.

If these elements of the crime are not evident in your case according to the prosecutor's available evidence against you, you cannot be guilty of violating PC 550(a)(4).

Multiple Claims

You can also violate auto insurance laws by submitting or presenting multiple compensation claims for a similar loss to your auto insurance provider or a different auto insurer knowingly with the criminal intent to deceive or defraud.

A violation of subsection (a)(4) of PC 550 is a felony offense that comes with an incarceration term of 2, 3, or 5 years and a fine not exceeding $50,000.

False Statements

Penal Code 550(b)(1)-(4)  makes it unlawful for any person to do or participate in any of the following fraudulent acts:

  • Make or give out any oral or written statements with intent to defraud your auto insurance provider, knowing these statements or declarations contain misleading information concerning the facts of the case.
  • Make or give out oral or written declarations with intent to defraud your auto insurance provider by knowingly and falsely declaring that you are a California resident when you actually reside or live somewhere else.

The prosecutor will file a violation of PC 550 (b) (1)-(4) as either a felony or misdemeanor, depending on the unique facts of your alleged case and your criminal history. A felony conviction of this offense will make you subject to the same punishment as other auto insurance fraud crimes discussed above.

However, if the prosecutor secures a misdemeanor conviction against you for this offense, possible penalties you are likely to face will be less severe, including:

  • A fine amounting to up to $10,000
  • A maximum of one year term behind bars
  • Summary (misdemeanor) probation

Causing an Accident

According to PC 550(a) (3), it is unlawful to participate or cause a vehicle accident with the intent to defraud your auto insurance provider by filing a fraudulent compensation claim. The court will consider you guilty of causing an accident with the criminal intent to defraud your auto insurance provider if the facts below are true:

  • The alleged vehicle accident was a natural, direct, and probable result of your actions or behavior.
  • The alleged accident would not occur without your act

The crime of causing an accident with intent to defraud your auto insurer is also chargeable and punishable as a felony under the law, and an offender can be subject to the following possible penalties:

  • Felony probation
  • A fine amounting up to $50,000
  • An imprisonment term of two, three, or five years

Business Owners and Employees Auto/Car Insurance Fraud

Various owners, representatives, and employees of companies or businesses dealing with car insurances can also be liable for violating auto/car insurance fraud law under Penal Code 549 PC in various ways. Once they do so, they become subject to criminal liability, which is chargeable and punishable under the law. 

Below are common ways parties mentioned above violate auto insurance law under PC 549:

  • When an auto or car insurance company or agent knowingly accepts, solicits, or refers to a business from or to an entity or a person with disregard, this person or entity intends to commit an auto insurance fraud.
  • Also, when an auto repair shop gives commission, fee, or any other type of compensation to an insurance broker, adjuster, or agent to refer various policyholders to their business for maintenance and repairs that have auto insurance coverage.

Since this form of auto insurance fraud is chargeable as a wobbler offense, the prosecutor can choose to file your specific case as a felony or a misdemeanor, depending on your case facts. A conviction of this offense as a felony will most likely lead to the following consequences:

  • An incarceration term of 16 months, 2 or 3 years
  • Felony probation
  • A fine not exceeding $50,000 or twice the amount of money involved in the fraud, whichever amount is greater

However, when the prosecutor secures a misdemeanors conviction against you for participating in this form or type of auto insurance fraud, you will be subject to the following probable consequences:

  • An incarceration term of 1 (one) year
  • A fine not exceeding $1,000
  • Misdemeanor probation

Typically, prosecutors will treat a second conviction for violating any of the above auto insurance statutes as a felony and might probably make you subject to the consequences mentioned above. In most car insurance fraud cases, the prosecutor will file several counts of PC 550 offenses and at least one charge for violating Business and Professions Code section 810.

When you are a healthcare professional like a dentist or a doctor, a conviction for violating Business and Professions Code section 810 by committing or participating in an insurance fraud will not only make you subject to an imprisonment term and a fine. A conviction of these offenses can also affect your business reputation and even jeopardize your professional business license. 

To be on the safe side of the law when you face a possibility of conviction for violating an auto/car insurance fraud statute, you must seek the help of a criminal defense attorney for legal guidance and representation to counter the alleged charges.

Viable Legal Defense Arguments to Counter Auto Insurance Charges

Undoubtedly, the possible consequences resulting from a conviction of an auto insurance fraud charge can affect many parts of your daily activities, including your freedom. With the legal representation of an experienced and reputable defense attorney, you might be able to counter auto insurance fraud allegations or charges against you by raising the following viable defense arguments:

You Did Not Intend to Commit or Participate in the Alleged Offense

As mentioned above, the defendant must have "criminal intent" to defraud his/her auto insurance during commission or participation in the alleged fraudulent acts to be guilty of violating auto insurance fraud law. Therefore, a reliable and intelligent defense attorney can argue that the alleged fraudulent acts against you were a mistake, meaning you didn't intend to defraud your auto insurer.

When this defense strategy works in your favor, the jury can dismiss or reduce the alleged car insurance fraud charge against you to a less severe alternative offense with less severe consequences.

Insufficient Evidence

Typically, there are complex laws and legal facts surrounding auto insurance fraud cases. It is upon the prosecutor to convince the jury that you are guilty of the alleged charge. A reliable defense attorney can keenly examine the prosecutor's evidence against you to find a weakness to counter fraudulent charges against you.

For instance, the lack of eyewitnesses to testify against you makes the prosecutor's case weak, making it reasonable to argue that there is a lack of sufficient evidence to prove you guilty of the alleged charge.

False Accusation

A wrongful conviction is not an uncommon issue with the criminal justice system, and unfortunately, it does affect many people every day. Without proper legal defense on your side during the prosecution process for an auto insurance fraud charge, you might end up serving a life-altering sentence for an offense you didn't commit or aid in the commission of it.

The only strategy you can increase your chances of fighting the auto insurance fraud allegations against you is by talking to an experienced defense attorney to fight for your interest and legal rights through the very court process for the best probable outcome.

Other Offenses Chargeable and Punishable Along with Auto Insurance Fraud

There are a few related offenses that the prosecutor can file against you if there is insufficient evidence to prove to the jury beyond a reasonable doubt that you are guilty of violating auto/car insurance fraud law. Below are common offenses closely related to an auto insurance fraud crime:

Arson

You violate arson laws under PC 451 if you maliciously and willfully burn your car with the criminal intent to defraud your auto insurance provider to pay you for the intentional losses. A conviction for violating PC 451 carries the following penalties:

  • A fine amounting up to $50,000
  • An imprisonment term in the state prison for 16 months, 2, or 3 years

Healthcare Fraud

Whether fraudulent or real, a car accident can make you subject to both health insurance fraud and car insurance fraud charges for allegedly submitting multiple or fraudulent claims for both of your medical expenses and car damages. PC 550 prohibits various forms of healthcare insurance fraud related to car insurance fraud, and the possible consequences are similar. 

Below are common ways people commit healthcare fraud:

  • Submitting multiple compensation claims for similar medical services
  • Billing your insurance company to pay for medical services you didn't receive

Making a Fraudulent Report of a Car Theft

Making a fraudulent report of car theft is unlawful according to Vehicle Code 10501 and is a common offense chargeable along with auto/car insurance fraud. Like it sounds, a person violates Vehicle Code 10501 when he/she makes a fraudulent or false report of car theft with the law enforcement officers with the intent to defraud.

Fraudulently reporting a car theft is typically a misdemeanor offense with a jail term not exceeding six months if you are a first-time offender. A well-informed attorney might be able to persuade the prosecutor to drop your alleged auto/car insurance fraud case or reduce it to a less severe offense like making a fraudulent report of a car theft that carries less severe penalties.

Find a Criminal Defense Attorney Near Me

For any questions and legal representation following an auto insurance fraud charge, do not hesitate to contact experienced and skilled attorneys at Darwish Law for a confidential consultation to discuss your case. If you live in Santa Ana, you can call us now at 714-887-4810 to schedule your first initial consultation with our understanding attorneys.