The elements of insurance fraud

On Behalf of | Jan 6, 2022 | Firm News |

Fraud refers to acts of deception that people commit for financial gain. There are several types of this crime one can commit, one of which is insurance fraud.

According to FindLaw, insurance fraud costs Americans as much as $80 billion a year in increased premiums. This figure does not take into account the more than $60 billion in lost benefits that Medicare fraud causes each year. Because of the high costs, and due to increased pressure from the insurance industry, most states now have specific criminal statutes dealing with insurance fraud. California is one of them.

What constitutes insurance fraud in California

According to the California Department of Insurance, the four elements prosecutors must prove to establish insurance fraud are as follows:

  • Intent: Prosecutors must prove that defendants knowingly committed an act with the specific intent to defraud another person or entity.
  • Action: The prosecution must show that a defendant acted on a misrepresentation. Simply making a falsehood — either spoken or written — is not enough to convict a person of fraud.
  • Intent and Action: Separate, intent and action mean nothing. The prosecution must prove that the act and intention came together.
  • Actual Loss: Finally, the prosecution can prove that the defendant’s actions caused a monetary loss.

Categories of insurance Fraud

Insurance fraud takes several shapes and forms, often making it difficult for law enforcement to spot. However, of the dozens of types of insurance fraud people can commit, most crimes fall into one of seven categories: automobile, life, workers’ compensation, medical, property, health care and fire. California also recognizes an “other category,” which includes casualty and agriculture/livestock.

Regardless of the type of insurance fraud charges a person faces, the penalties can be steep. A person who faces such charges needs a strong case to avoid the worst consequences.