Insurance fraud can occur in many different ways. A person or entity may try to defraud the insurer by increasing the amount of a valid claim or by creating a false claim. Insurance fraud, depending on the type of fraud and the amount defrauded, is considered a crime and is punishable by law. Each state has specific laws governing insurance fraud and standards to determine if the fraud is a misdemeanor or a felony. American Tri-Star Insurance San Diego recommends you know the laws surrounding insurance fraud and what can happen if an offender is convicted.
- Misdemeanor fraud may require the person convicted to repay all of the money acquired from the fraudulent act and serve time in jail. On some occasions, jail is not required if the person performs a significant amount of community service activities.
- Felony fraud conducted by a business, generally considered a value of $5,000 or over based on state laws, can result in repayment of all monies collected, loss of professional or business license, and potential jail time for the business owner or manager who committed the fraud.
- Felony fraud committed by an individual can result in restitution for all monies received and a jail sentence. In most cases, felony fraud requires the sentence to be served in prison and not just the local jail.
- If a medical practitioner commits fraud by submitting padded or fake medical bills, he or she faces repaying all of the monies collected, jail time, and loss of medical license. If this fraud is committed against a government entity, the medical practitioner can face federal felony charges with serious punishments attached.
- Individuals who commit fraud by faking injuries so they can acquire pain medications face many different charges. Depending on which state the event occurred in, the person convicted of fraud under these circumstances could also face additional drug possession charges.
Insurance exists to protect you and your property, but those who abuse the system make it more difficult for those who have valid claims. With a trusted agency on your side like American Tri-Star on your side, you’ll have all the information you need to know about what types of claims are allowed in your area. For quotes on affordable auto, homeowners, commercial, and bond insurance in San Diego, give us a call at 619-272-2100. We hope to hear from you soon.