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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 insureriv

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 insurerv, (3) Knowingly submitting multiple insurance claims for the same lossvi, (4) Knowingly cause an accident for the purpose of obtaining money from the insurervii, (5) Knowingly submitting an insurance claim for loss of contents in a vehicle, when you know the vehicle and the contents are not lostviii; and (6) Preparing a written statement in support of an insurance claim, knowing that it is falseix. 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 companyx.

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 accidentxi;
  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.

I Have Been Convicted of Auto Insurance Fraud, What Penalties May I Be Facing?

The California Penal Code punishes Auto Insurance Fraud in an extremely harsh manner. §550(c)(1) makes clear that any person who is found guilty of any of the conduct listed above, is guilty of a felony. The penalties become even harsher depending on whether or not the Defendant has prior convictions, and what those prior conviction are for. If you are convicted under §550(a)(3) the penalties become immensely more severe.

If you are convicted of violating §550(a)(1)-(5), you will face incarceration in county jail for a period of two (2), three (3), or five (5) years and a fine of up to $50,000. Alternatively, the fine will be calculated by doubling the amount the Defendant attempted to defraud the insurance company for; the Court will impose the higher amount.

If you are convicted of violating §550(a)(1)-(5) and you have prior convictions for violating §548(a), you will face an additional two years of incarceration for each prior conviction.

If you are convicted of violating §550(a)(3)xii and you have two prior felony convictions for the same violation, they will face an additional five (5) years in county jail.

If you are convicted of §550(a)(3) and anybody other than an accomplice suffers serious bodily injury (SBI), you will face an additional two (2) years of incarceration for each person who suffered serious bodily injuries.

EXAMPLE:

Dan has two prior convictions for causing an accident with intent to defraud the insurance company. Dan has just been convicted for a third time, where 4 people in the other vehicle suffered serious bodily injury (SBI). Dan will face incarceration in county jail for a period ranging from eighteen (18), nineteen (19), or twenty-one (21) yearsxiii.

If you are convicted of Auto Insurance Fraud, and the fraud occurred in what is known as an “Auto Fraud Crisis Area”xiv, you will face double the fine.

I Have Been Accused of Auto Insurance Fraud, How Can Los Angeles Criminal Lawyer Help Me?

As you can see from the penalty section of this article, Auto Insurance Fraud is punished severely in California. In light of the severity of the potential penalties associated with a conviction for Auto Insurance Fraud, it is essential that you retain counsel immediately if you have been accused. The attorneys at Los Angeles Criminal Lawyer have decades of combined experience representing clients whose very livelihoods are at stake. At LACL we take the time to handcraft a defense for you and your case. Utilizing our decades of experience, we will attempt to convince the District Attorney to dismiss or reduce the charges, pointing to the facts we have obtained from you in the initial consultation as well as any information our investigations uncover. In the event the District Attorney is unwilling to dismiss or reduce the charges, our skilled trial attorneys will advocate zealously on your behalf in Court. In the unfortunate event that the jury renders a guilty verdict, Los Angeles Criminal Lawyer will attempt to persuade the judge to impose a lesser sentence that the District Attorney is advocating for.

At the end of the day, having competent counsel can have a profound impact on the outcome of an Auto Insurance Fraud case. Having the very best attorneys available is essential, and Los Angeles Criminal Lawyer is the very best criminal defense firm around.

If you or a love one has been accused of Auto Insurance Fraud, contact Los Angeles Criminal Lawyer today at 310-502-1314 for a FREE consultation!


i Fraudulent Gaming can be found in the Good Morals section of the California Penal Code.

ii This article will not go into an in-depth analysis of what it means to act “willfully.” To put it simply, someone acts willfully when they intended the act, as opposed to the result.

iii It does not matter who owns the property, as long as every other element is satisfied.

iv This is a specific intent element, and requires that the Defendant intended for the insurer to bear the burden of their acts.

v §550(a)(1)

vi §550(a)(2)

vii §550(a)(3)

viii §550(a)(4)

ix §550(a)(5)

x The penalties associated with a conviction under §550(a)(3) are extremely severe, especially if someone suffers serious bodily injury (“SBI”). It should be noted however, that proving a violation of this section will be incredibly difficult as the Prosecutor will have to prove both the Defendant’s intentions in (a) causing he accident and (b) for the purpose of defrauding the insurance company. If you are accused of violating §550(a)(3), the attorneys at Los Angeles Criminal Lawyer will vigorously pursue a dismissal of all charges on the basis that the Prosecution likely does not have sufficient evidence to obtain a conviction.

xixi The “or was involved in” language is designed to include people who drive in a way where they can’t be said to have caused the accident (i.e. slamming on your breaks so someone rear-ends you)

xiixii Causing an accident for the purpose of defrauding the insurance company.

xiii Keep in mind that §550(h) allows for Auto Insurance Fraud to be accompanied by other criminal charges, in this context Dan will likely face additional charges. This example is designed to highlight just how quickly things can get out of hand if you are convicted of Auto Insurance Fraud.

xiv These areas are identified by the Insurance Commissioner.

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