Insurance fraud happens every day all over the United States. And anyone can be a victim.
Insurance is an easy target because many people incorrectly see it as a low-risk crime with big rewards. The Coalition Against Insurance Fraud estimates that over $80 billion – yes, billion – is stolen in insurance schemes every year. And this is actually a conservative number because a lot of insurance fraud isn't reported or detected.
Fraud can result in big personal and financial costs for consumers, businesses, the government, and society. Because of this, the penalties are quite severe. So if you've been charged with insurance fraud, you should take the charges seriously. The best way to do this is to hire an experienced insurance fraud defense attorney who can help you fight for your rights and avoid these penalties.
What Is Insurance Fraud?
Insurance fraud happens when people use deception with an insurance company to receive money that they aren't entitled to. Insurance companies can also commit fraud by denying a policyholder or health care provider a benefit that is due.
The most common types of insurance fraud involve health insurance, automobile claims, life insurance, and property insurance. Here are just a few of the many examples of possible insurance fraud.
- A health insurance claim could be when a person claims to have a fake injury in order to receive prescription drugs or get insurance payments.
- A fraudulent car insurance claim could be when someone says there was more damage to their car than there actually was.
- If someone fakes their death or the death of another for life insurance payments, this is another form of fraud.
- Property insurance fraud may occur when someone claims their property was stolen even though it wasn't.
Insurance fraud is illegal throughout the United States, and many states – including Illinois' Department of Insurance – have created insurance bureaus to investigate fraud. Insurance fraud can be charged as a misdemeanor, felony, or even a federal crime depending on the type of insurance fraud allegedly committed.
What Are the Aspects of Insurance Fraud?
In order to be convicted of insurance fraud, the prosecution has to prove that certain aspects were met. These aspects include:
Knowingly making a misleading or false statement. Like all fraud, a big element of the offense is whether or not lying was involved. If you make a false statement, but you're unaware that it's false, then you didn't knowingly make a false statement.
For example, let's say you're filing a car insurance claim and you report in good faith that your car has 80,000 miles on it but it actually has 100,000 miles. In this case, you didn't commit fraud because you reported the original miles in good faith. Once you determined that you were wrong and reported incorrect miles, you are responsible for correcting your mistake to the insurance company.
If you purposefully lie about the miles on your car, however, you are then committing fraud.
The false statement was made in regards to an insurance claim or payment. If you give a false statement that is connected to the terms of an insurance policy – whether it's for or against a claim or payment – then that's insurance fraud. Examples of this could include a false claim made to an insurance company, an exaggerated claim, a false statement made to a doctor connected with an insurance claim, or even false statements made by medical providers to insurance companies about the services they have performed.
The statement is material. The false statement you make also has to be material – or important – to the insurance payment or claim. If you lie during an insurance claim investigation but your lie isn't important or doesn't affect the outcome of the claim, then you haven't committed fraud. But if the statement you make is crucial to the claim and specifically affects the outcome of that claim, then you have committed fraud.
Penalties for Insurance Fraud
Fraud can often be divided into two categories: soft fraud and hard fraud.
Soft fraud – usually exaggerating an existing claim – is generally a misdemeanor charge punishable by fines, community service, probation, and up to one year in jail.
Hard fraud – usually causing or fabricating a loss for the purpose of insurance money – is almost always a felony punishable by a state prison sentence.
In Illinois, you can be charged with a Class A misdemeanor if the amount of money obtained is $300 or less. If the amount is over $300, you will be charged with a Class 3, 2, or 1 felony, with a Class 1 felony being the harshest punishment.
If you have been charged with insurance fraud, it's best to contact an experienced insurance fraud lawyer with a proven track record who understands Illinois law and can help you fight the charges by getting them reduced or possibly dismissed.