Car Insurance Fraud Carries Major Penalties

Car accidents are expensive. According to recent surveys, the average settlement for a car accident is around $24,000. This is why Texas requires that motorists have insurance when registering their vehicles. Sadly, some people are tempted to file false insurance claims to obtain compensation they are not entitled to. They might never have been in a crash, or they might exaggerate their injuries to get a bigger payout.

In Texas, insurance fraud is a crime spelled out in Section 35.02 of the Penal Code. Anyone caught committing insurance fraud could face years in jail, huge fines, and a loss of reputation. Please call Tad Nelson & Associates to speak with our League City criminal defense attorney if you are accused of committing insurance fraud.

What is Insurance Fraud?

The insurance system depends on honesty. Unfortunately, fraudsters can gum things up by lying about certain facts when applying for insurance or when submitting a claim. Under the statute, you can face charges if you: 

• Prepare or present a statement in support of a claim that you know contains false or misleading information; or
• Prepare or present a statement in support of an application for insurance that you know contains false or misleading information; or
• Solicit, offer, pay, or receive a benefit for furnishing goods or services in connection with the submission of a claim.

To be convicted, you must have acted with the intent to deceive or defraud the insurer. Also, any false or misleading information must be material. An immaterial fact, like getting the color of the car that hit you wrong, would not constitute insurance fraud.

Examples of Car Insurance Fraud

Here are some examples of insurance fraud perpetrated against a car insurer:

• You submit prescription drug receipts in support of your accident claim, but the drugs were for your spouse who was not hurt in the accident.
• You lie in your insurance claim and state you had a green light when you passed through the intersection.
• You falsely claim that you have been receiving treatment for neck pain when you haven’t.
• You use a fake Social Security number to purchase car insurance.
• As an attorney, you offer payments to a doctor to write medical opinions for your clients in which the doctor deceptively claims they are injured.
• As a doctor, you accept payments for submitting false reports about a claimant’s injuries.

Penalties for Car Insurance Fraud

The penalties will depend on the exact type of fraud you commit.

If you committed fraud when applying for an insurance policy, you have committed a state jail felony. That means a maximum of 2 years in state jail, along with a $10,000 fine.

If you submitted a false claim, then your penalties depend on the amount of money stolen. This is how most fraud is prosecuted.

• For example, if you defrauded an insurer of at least $750 but less than $2,500, you would face a Class A misdemeanor charge. Maximum penalties are 1 year in jail and a $4,000 fine.
• If you defrauded them of between $30,000 and $150,000, you could face third-degree felony charges, which means a max of 10 years in prison and a $10,000 fine.

If your fraud consists of soliciting, paying, offering, or receiving a benefit to deceive an insurer, then you are punished based on the amount defrauded, as explained above.

Can You Defend Against Car Insurance Fraud?

Yes. Here are two of our most successful defenses.

Lack of Intent

Probably the most common defense is that you did not intend to defraud or deceive the insurer. It’s not illegal to submit an application or a claim with inaccurate information. People do that all the time, probably because they are rushing through the paperwork.

It’s also not illegal to offer or solicit services in connection with an insurance claim. Car accident lawyers regularly help their injured clients find a doctor for treatment. Soliciting a doctor’s help isn’t fraud.

These actions become fraudulent when you have a deceptive intent. That is hard for the state to prove because intent is based on what is happening in your mind. We can try to cast doubt on whether you had the requisite fraudulent intent.

False Information is Immaterial

Your claim or application might have some errors in it, but they are not material to the claim. For example, you might have gotten your address wrong or the date you went to the hospital. That type of information probably does not impact the claim, so you haven’t committed fraud.

Call Our Galveston Fraud Lawyer for Help

Call Tad Nelson & Associates to speak with our firm in a free consultation.