Auto Insurance Fraud In California

In the Fraud section of this website, we discuss: (1) Fraudulent Gaming, (2) Check Fraud, (3) Identity Theft, (4) Credit Card Fraud, (5) Health Care Fraud; and (6) Auto Insurance Fraud. With the exception of Fraudulent Gaming, every other form of fraud is considered a Crime Against Propertyⁱ. The crimes of both Health Insurance Fraud and Auto Insurance Fraud are set forth in Chapter 10 of Crimes Against Property: Crimes Against Insured Property and Insurers.

Auto Insurance Fraud in California is an extremely complicated criminal charge because of the complexity of the evidence required to sustain a conviction, and the penalties someone convicted of Auto Insurance Fraud can face; this crime has the potential for substantial sentence and fine enhancements.

A conviction for violating §548 carries stiff penalties, which will be discussed below. Considering the potential consequences of a conviction, it is important to have representation that understands the law, and is familiar with the local Courts, Prosecutors, and Judges. At Los Angeles Criminal Lawyer, we have significant experience with all criminal charges. With several decades of combined experience dedicated exclusively to representing individuals accused of criminal conduct, Los Angeles Criminal Lawyer provides their clients with the best opportunity to obtain a favorable outcome to their case.

What is Auto Insurance Fraud?

California Penal Code §548 defines the general crime of defrauding or prejudicing an insurer, California Penal Code §550 provides specific methods not included in the §548 definition, and provides different penalties depending on which provision was violated.

The general statute defining fraud against an insurer defines “defrauding or prejudicing an insurer” as consisting of four (4) elements:

1. The Defendant acted “willfully”ⁱⁱ;
2. While acting willfully, the Defendant abandoned, injured, hides, abandons, or otherwise disposed of;
3. Property that was insured against theft, loss, embezzlement, or other casualtyⁱⁱⁱ;
4. With the intent to harm the insurer^iv

Including §548 above, there are six (6) ways a person can be found guilty of Auto Insurance Fraud: (1) the Defendant abandoned, injured, hides, abandons, or otherwise disposed of insured property with the intent to defraud the insurer, (2) Knowingly presenting a false or fraudulent claim for payment from an insurer^v, (3) Knowingly submitting multiple insurance claims for the same loss^vi, (4) Knowingly cause an accident for the purpose of obtaining money from the insurer^vii, (5) Knowingly submitting an insurance claim for loss of contents in a vehicle, when you know the vehicle and the contents are not lost^viii; and (6) Preparing a written statement in support of an insurance claim, knowing that it is false^ix. It is important to be aware that §550 applies to both the person who committed the acts listed above, and anybody who aids, abets, conspires with, or solicits the person who committed any of the acts listed above.

EXAMPLE (1):

Dan had an old broken down car, which nobody wanted to buy. Needing money fast, Dan drove his car into a nearby lake and submitted an insurance claim for theft. Dan has violated §548 because he acted willfully when he drove his car into the lake, he destroyed his car, his car was insured against theft, and he intended to defraud the insurance company because he needed money quickly.

EXAMPLE (2):

Using the exact same scenario as above, Dan has also violated §550(a)(1) by knowingly submitting a false claim; Dan knew his vehicle wasn’t stolen and submitted a claim for loss by theft anyways.

EXAMPLE (3):

Dan’s vehicle is insured by two separate insurance companies. Dan needed money fast, and destroyed his vehicle. After destroying his vehicle, Dan submitted an insurance claim to both insurance companies, hoping they would give him the money before they caught on. Dan has violated §548 and §550(a)(2) because he submitted multiple claims for a single loss.

EXAMPLE (4):

Dan read a blog about Auto Insurance Fraud, and knew that if he willingly destroyed his vehicle and submitted a claim, he would be on the hook for Auto Insurance Fraud. Nonetheless, Dan needed money, but didn’t want to get into trouble. While driving, Dan noticed someone was far too close to him and slammed on his breaks. The car behind Dan smashed into the rear of his vehicle causing the Dan’s car to be “totaled.” Dan Then filed an insurance claim with his car insurance, and a health insurance claim. Dan has violated §548 and §550(a)(3) because he intentionally caused an accident for the purpose of obtaining money from the insurance company^x.

EXAMPLE (5):

Dan needed money fast, and came up with a clever ploy. Dan and his friend Dante parked Dan’s car on the street, and removed the engine; they hid it in Dan’s garage. Dan then submitted an insurance claim for the theft of his motor. Both Dan and Dante have violated §550(a)(4) because Dan claimed a loss of a part of the vehicle knowing the part was not lost. Dante will be held accountable as well because §550(a) clarifies that the statute applies to both the person who committed the act, and anyone who helped that person commit that crime.

EXAMPLE (6):

Dan had recently been in an accident, and decided he would use the opportunity to get some extra money. Dan took his car to his friend Deeno’s auto body shop for repairs, and asked him to inflate the numbers so he could submit the claim for reimbursement; he said he would split the difference with Deeno. Deeno made an invoice with inflated prices, and submitted it to the insurance company. Both Dan and Deeno have violated §550(a)(5) because Deeno knowingly submitted a writing with inflated numbers to the insurance company for the purpose of supporting Dan’s false claim. Dan has also violated §550(a)(5) because he solicited Deeno to submit the fraudulent writing.

While California Penal Code §550(a)(6) through (9) deals with Health Insurance Fraud, this section makes it a crime to defraud Worker’s Compensation, even if you didn’t submit the claim; this means if you lie to your employer and they file the Worker’s Compensation claim on your behalf, you can still be found guilty of insurance fraud.

It is important to note that the crime of Auto Insurance Fraud is completed on attempt, this means that it is not an element of the crime that you actually obtained anything. Attempting to defraud an insurance company is the crime, if you succeed that will be considered when the Court is determining the penalty to impose if you are convicted of Auto Insurance Fraud.

Violating California Penal Code §548(a) is a felony, and if you are convicted you will face incarceration in County Jail for a period ranging from two (2), three (3), or five (5) years and/or a fine not exceeding fifty-thousand ($50,000) dollars.

If you have previously been convicted of violating California Penal Code §548(a), then penalty becomes even more stiff. California Penal Code §548(b) authorizes a two (2) year enhancement for each prior conviction under §548(a) the Defendant has.

EXAMPLE:

Dan has two prior convictions under §548(a), and has just been convicted under that section for the third time. Dan will face incarceration for a period of six (6), seven (7) or nine (9) years in county jail.

As mentioned above, California Penal Code §550 lists other actions a Defendant can take, which would subject them to criminal charges. The remainder of this article will address: (1) The most-common charges under §550, (2) the penalties you may face if you are convicted of Auto Insurance Fraud; and (3) What Los Angeles Criminal Lawyer can do to assist you if you have been accused of Auto Insurance Fraud.

Submitting fraudulent claims is the most common form of Auto Insurance Fraud in California that Defendants are charged with.

California Penal Code §550(a)(1) – Fraudulent Insurance Claims

Under this section, it is a punishable offense to make any false claim to obtain money for an injury or loss. This section includes making claims to an insurer, which is also addressed in §548(a). As such, attempting to obtain payment for an injury or loss from another individual would be sufficient to satisfy this statute. Again, it is important to be aware that anyone who helped the individual who made the false claim will also be at risk of a conviction under §550(a).

EXAMPLE:

Dan and Victor were in a car accident. Not wanting insurance to get involved, Victor told Dan he would pay for his car repairs. Dan went to his friend Deeno who frequently repaired his friend’s cars for free, and obtained a receipt for $2,000. Dan approached Victor with the bill, and asked him to pay. Dan has violated §550(a)(1) notwithstanding the fact that Victor is not an insurance company.

California Penal Code §550(a)(2) – Submitting Multiple Claims

A less common form of Auto Insurance Fraud occurs when the Defendant knowingly submits more than one claim for the same loss to an insurance company. This can be accomplished by submitting multiple claims to the same insurance company, or by submitting multiple claims to multiple insurance companies.

In order to obtain a conviction under §550(a)(2) the Prosecution must prove:

1. The Defendant acted knowingly;
2. The Defendant submitted multiple claims to insurance companies;
3. Those claims were for the same event; AND
4. The Defendant intended to defraud the insurance company.

As a practical matter, the Prosecution will have a more difficult time proving a violation of §550(a)(2) if the Defendant filed multiple claims to the same insurance company. This is because it will be incredibly difficult to convince a jury that the Defendant intended to defraud the insurance company as opposed to it being an innocent mistake. In contrast, the Prosecution will have an easy time convincing the jury of intent to defraud if the Defendant submits multiple claims to multiple insurance companies.

The final form of Auto Insurance Fraud discussed in this article carries incredibly severe penalties if certain events occur.

California Penal Code §550(a)(3) – Causing an Accident for the Purpose of Filing a False Claim

As mentioned above, a conviction under §550(a)(3) can cause an already harsh penalty to become even more harsh. To be convicted under §550(a)(3) the Prosecution must show:

1. The Defendant acted knowingly;
2. The Defendant either caused, or was involved in any kind of vehicle accident^xi;
3. The Defendant was involved in the accident for the purpose of defrauding the insurance claim.

In most cases, the Prosecutor will have a difficult time proving the elements of a §550(a)(3) violation, since they have to prove that the Defendant intended to get in an accident and that the purpose of intentionally getting into an accident was to submit a fraudulent claim to an insurance company. As a practical matter, unless the Defendant has been in an excessive amount of car accidents it will be difficult to prove intent to defraud or intent to get in an accident.

Auto Insurance Fraud is a felony in California, and if you are convicted, you may face severe consequences.