Insurance fraud is a common white-collar crime that changes the intention of insurance from a risk protection plan to a money-making scheme.
If you have charges relating to insurance fraud, you need to take immediate steps to prevent strict punishment. Insurance fraud is a complex charge, and you need to hire a professional insurance fraud lawyer to handle the case.
What is Insurance Fraud?
Insurance fraud is a process of intentionally breaking an insurance contract. The insurance provider or buyer can commit insurance fraud.
Insurance fraud happens on the providers’ part when they refuse to submit premiums, sell policies illegally, refuse to honor claims, and alter policies to make more profit or commissions.
On the buyer’s side, insurance fraud is when buyers use false information when buying policies, staging events that will pass as an accident, exaggerating claims, and using other means of getting money justly from issuers.
Examples of Insurance Frauds
Insurance fraud occurs in almost every field, although some insurance fields are more susceptible. Here are typical examples of insurance fraud:
Health Insurance Fraud
Health insurance fraud is a prevalent example of the phenomenon because it cuts across almost all sectors, including automobile and property insurance. Health insurance fraud can happen in different forms. The healthcare facility may modify prices for treatment and include false or exaggerated medical reports to get more money.
Insurance buyers or employees under an organization’s insurance coverage may also connive with health practitioners to falsify medical reports such as a workplace accident to gain more compensation.
Also, health insurance fraud may be inputting false information when filling application forms for medicare and other health insurance programs.
Workers Compensation Fraud
It happens when employers find a means to reduce compensation for their workers. They may do this while including their employees in their coverage by misinforming providers on the duties of their employees. Most times, they try to undermine the work risk to reduce compensation in the event of any occurrence.
Also, employees can be guilty of compensation fraud. They may fake accidents or work with health staff such as doctors to give fake diagnoses and exaggerate the extent of the injury.
Unemployment Insurance Fraud
Unemployment insurance fraud involves enjoying unemployment benefits from the government even when you are not eligible. Employers are guilty of this fraud when they try to evade tax for a particular employee account.
Claimants are also guilty of unemployment insurance fraud when they intentionally provide false information filling their employment status forms. They receive state benefits for unemployment when they are employed or are not eligible for unemployment insurance.
Auto Insurance Fraud
It is also widespread insurance fraud. There are different ways to commit auto insurance fraud. One way is by doing a fake registration. It may be false information about your address; you may fill in a low-risk location as your address to decrease the premium for your car coverage.
It can also be staging an accident or damage to your vehicle to receive excessive compensation. Car repairers may also give an overpriced estimate for car damage to receive more money from insurance providers.
Federal Insurance Laws
You have committed an insurance fraud federal crime if you are guilty of these charges:
- Intentional effort to break the insurance agreement.
- Have completed the illegal process. For example, the offender has collected undue compensation.
Several federal bodies regulate insurance fraud, such as;
- National Insurance Crime Bureau (NICB)
- Coalition Against Insurance Fraud (CAIF)
- National Association of Insurance Commissioners (NAIC)
- Reputable insurance company
- Federal Bureau Of Investigation (FBI)
Insurance Frauds Punishment
There are two significant categories of insurance fraud. The first category is soft fraud. Soft fraud occurs when an individual falsifies information to reduce the premium or increase compensation depending on the situation. It is also when insurance providers conduct processes that help them to gain more money.
Hard fraud occurs when an individual intentionally destroys a property or stages an accident to get compensation. Soft fabrication has less punishment. Individuals or organizations found guilty pay fines, short jail terms, probation, or community service.
Hard fraud has stricter punishment. The standard penalty is a long prison sentence. Insurance fraud punishment depends on the state you commit the crimes.
Is Insurance Fraud a Felony?
Insurance fraud is a felony if it’s a hard fraud. The extent of damage is assessed; if there is massive property destruction or loss of lives, you can be charged with a felony. Also, if the compensation or money you have gained from insurance fraud is enormous, you can be charged with a felony.
How to Defend Yourself from Insurance Fraud Charges
Insurance fraud is a punishable offense under the law. Organizations or individuals involved in the act pay a considerable fine and, depending on the severity of the fraud, can face a prison term.
An insurance fraud lawyer will work to understand the underlying facts and circumstances of the prosecution’s case in order to assert all available defenses to the charges.
One insurance fraud defense strategy is to rebut the prosecution’s attempt to show that not only did you commit the fraudulent offense with which you were charged, but that you did so with fraudulent intent. It is not enough for the prosecution to prove that fraud occurred if you did not intend to commit fraud. Similarly, it is not enough for them to prove that you intended to commit fraud if nobody was defrauded.
Another common defense to insurance fraud charges is that the fraud was a mistake of fact. In other words, this defense tactic asserts that the insurance company made a mistake or that the prosecution’s entire case was built on nothing more than a misunderstanding about the basis of the claim. If defense counsel can successfully rebut the charges this way, the case may be dropped entirely.
Sometimes, the most effective defense strategy is that the prosecution doesn’t have enough evidence to prove their case beyond a reasonable doubt. Remember that the defendant does not have to prove that they are innocent of the charges; the law says that the prosecution must prove to the jury that the defendant committed fraud, and there can be no reasonable doubt of the defendant’s guilt. If the prosecution’s case simply is not strong enough to meet this burden of proof, the jury should not convict.
You need the help of an expert insurance fraud defense attorney. Zoukis Consulting Group offers professional insurance fraud attorneys that can represent you. Our attorneys can help to prevent or reduce the fines, years of imprisonment, and other punishments you may be vulnerable to when facing insurance fraud charges.
Schedule a free consultation with Zoukis Consulting Group today.
Published Feb 15, 2022 by Christopher Zoukis, JD, MBA | Last Updated by Christopher Zoukis, JD, MBA on Feb 1, 2023 at 11:46 am