Auto insurance fraud reports have substantially increased throughout California in recent years. For this reason, federal and state law enforcement agencies have taken aggressive steps to pursue any attempts to defraud insurance companies. However, these authorities have also caused problems for innocent persons caught up in a misunderstanding.

Auto insurance fraud comes in several different forms. Some involve accusations of filing multiple claims, while others can result from making a statement the law officers believe was false to obtain fraudulent insurance compensation. If you have been charged with any of these forms of fraud in Riverside, attorneys at the Riverside Criminal Defense Attorney Law Firm could help. Irrespective of the facts surrounding your case, contacting our law firm will put you on the path towards a favorable resolution of the charges against you. 

Why Are Auto Insurance Fraud Cases on the Rise?

Drivers must have valid auto insurance to be able to drive on California roads. Based on the limit and kind of coverage, insurance is required to pay for the injuries to someone else and vehicle damage resulting from a crash caused by another driver. If you’ve ever been in a collision, you understand how costly auto repairs can be, even for a minor fender bender. The medical bill might be over tens of thousands of dollars if anybody was hurt in the collision. With this kind of cash involved, auto insurance can be an attractive way for people to make money by defrauding other drivers or insurance providers. 

The Legal Meaning of Auto Insurance Fraud Under California Law

There are several types of insurance fraud, among them auto insurance fraud. As we mentioned, automobile insurance fraud takes many forms and is described under California PC 548 through to 551. Its legal definition and what elements of the crime the prosecutor must prove for a conviction depends on what Penal Code section you’re accused of violating. Here are the various forms of auto insurance fraud.

PC 548, Abandoning/Damaging a Motor Vehicle

Under PC 548, it is illegal to dispose of, abandon, hide, destroy, or injure a vehicle that’s insured against damage, destruction,  or loss intending to prejudice/defraud the insurer. ‘Intending to defraud’ means aiming to dupe the insurance provider so they can lose money or otherwise inflict damage upon their property, financial, or legal rights. The judge can find you guilty of automobile insurance fraud if you abandon, hide, destroy, or injure a vehicle,  whether or not the insurer loses money due to your actions notwithstanding. You can also be convicted even if the automobile isn’t yours. 

PC 549, Soliciting or Referring Auto Insurance Fraud Business 

PC 549 makes it an offense for:

  • An employee, representative, or owner of an auto-related business to solicit, refer or accept a business/person to or from another entity/person knowing that or with reckless disregard for whether that entity/person intends to file a fraudulent automobile insurance claim. 
  • A vehicle repair shop to solicit business from another person

This law applies to any association, partnership, corporation, firm, individual acting in their own capacity, or individual acting in their capacity as a private or public employee. 

PC 550, Fraudulent Claims 

PC 550 covers different kinds of automobile insurance fraud. Among them is 550(a)(4) PC, presenting a fraudulent/false insurance claim for damage, conversion, theft, or destruction of a car. For you to be convicted of this type of car insurance fraud, the prosecuting attorney must prove that:  

  • You filed a fraudulent or false insurance claim seeking compensation for losses resulting from theft, damage, conversion, or destruction of an automobile, its part, or contents 
  • You were aware the insurance claim was fraudulent/false 
  • When you filed the insurance claim, you aimed to defraud the insurance company or someone else

Like PC 548 abandoning/damaging a vehicle, the insurer or person you intended to defraud doesn’t have to suffer any financial loss due to your actions to be convicted. However, it’s critical to put in mind that you must’ve known the insurance claim was fraudulent or false to be convicted of this type of car insurance fraud. 

PC 550, Making False Statements 

Making false statements is a vehicle insurance fraud crime prosecuted under 550 PC subsection (b)(1) to (4). You violate this law by: 

  • Presenting any oral/written statement to oppose or as part of an insurance claim for a car insurance compensation or other benefits, aware that your statement contains misleading or false information regarding a given material fact
  • Making or preparing any oral/ written statement to oppose or as part of an insurance claim for a car insurance compensation or other benefits, aware that your statement contains misleading or false information regarding any given material fact
  • Making or preparing any written/oral statement intending to present it to a car insurance company to obtain auto insurance, that you live in California State when, in the real sense, you live somewhere else

PC 550, Causing an Auto Accident

Per PC 550(a) subsection (3), it is against the law to cause/participate in causing an auto crash, aware that the aim of that collision is so that you can submit a fraudulent or false insurance claim intending to defraud. You’re deemed to be guilty of car insurance if you cause a vehicle accident, and the following is true:

  • The collision was the direct, natural, and probable outcome of your action
  • The crash wouldn’t have occurred without you acting as you did

PC 550, Filing Multiple Claims 

Filing multiple insurance claims is another way you can violate auto insurance fraud statutes. This crime is prosecuted under PC 550(a)(2). To be convicted, the prosecution must show that:

  • You presented two or more insurance claims for the same loss to one or several auto insurance companies 
  • You knew you were submitting two or more insurance claims for the same loss 
  • You intended to defraud

PC 551, Insurance Fraud Kickbacks

Per PC 551, it’s illegal for an auto repair shop, employee, contractor, or dealer of a vehicle repair shop to offer an insurance adjuster, broker, or agent a profit, fee, commission, or any other consideration, also called a kickback, in exchange for referring policyholders to the shop for repairs covered by automobile insurance. 

Fighting Auto Insurance Fraud Charges

Prosecutors in California work tirelessly to probe and charge automobile insurance fraud cases for two primary reasons.

Firstly, automobile insurance fraud is seemingly a more significant problem in the state and throughout the country. Research by various industry groups approximates that at least 10% of casualty/property car insurance claims are false or fraudulent. 

Secondly, auto insurance companies have so much political power, and it’s in their best interest for police officers and prosecutors to take severe measures against automobile insurance fraud. The state’s Department of Insurance works hand in hand with local prosecuting attorneys to ensure suspected fraud cases are dealt with accordingly. 

Still, many innocent people face auto insurance fraud charges and don’t know what to do or where to go. These people are not only denied compensation for their car accident-resulting injuries and repairs but they’re also threatened with incarceration. In given cases, the threat of imprisonment is sufficient to compel an innocent individual into pleading guilty to receive a probation sentence. However, your lawyer may be capable of fighting and helping you avoid incarceration and keep your record clean. 

There are several defenses available for fighting automobile insurance fraud charges. They include: 

Insufficient Evidence 

Most automobile insurance cases are based on complicated facts. It could be difficult for the prosecution to prove beyond a doubt what actually happened, especially if there’s circumstantial evidence, conflicting testimony, or intricate paper trails involved. Your lawyer may be capable of spotting the ambiguities in the prosecutor’s case and assisting you in collecting the most compelling proof for your innocence. 

You Didn’t Have Any Fraudulent Intent

Intention to defraud an insurance company or someone is a key element of all automobile fraud crimes. Your car insurance company will often consider a careless blunder on your end as fraud and report you to the police. 

However, the burden lies with the DA to prove beyond any doubt that you aimed to commit car insurance fraud and weren’t simply making an error. Your attorney may be capable of poking holes in the DA’s assertion and creating enough doubt in the jury’s minds, which may make your charges be dropped, or the jury find you not guilty. 

Mistake of Fact 

A mistake of fact is another prevalent legal defense your lawyer can argue. At times, the insurance provider just makes an error. In other cases, law enforcement officers may misunderstand the basis for the insurance claim. When these mistakes occur, proving that the accusation against you was out of a misunderstanding can result in a charge dismissal. 

You Didn’t Know You Were Committing Auto Insurance Fraud. 

For the judge to convict you of most forms of automobile insurance fraud, the prosecutor must prove that you knew you were committing the crime. For instance, the prosecution must be capable of proving that you knew you were filing a false/fraudulent claim or making multiple claims to be guilty. If your lawyer can successfully argue you were not aware you were committing a crime when you acted, you may avoid a conviction. For instance, if you made a claim on insurance paperwork based on the fact that someone else told you the claim was valid, your lawyer could argue that you didn't knowingly make a false claim. 

Penalties of an Auto Insurance Fraud Conviction 

The consequences of an auto insurance fraud conviction vary depending on the law you violated. They are as follows: 

PC 548, Abandoning or Damaging a Vehicle 

PC 548, abandoning, hiding, destroying, or damaging an insured car intending to file a fraudulent insurance claim is a felony. Possible penalties upon a conviction are felony probation, up to 50,000 dollars in fines, and a prison sentence of two, three, or five years. You’ll also be subject to a sentence enhancement of two years for every past felony conviction of automobile insurance fraud under PC 550 or 548. 

PC 550, Multiple Claims/Fraudulent Claims

Both filing multiple claims per 550(a)(2) PC and filing a fraudulent or false claim under PC 550(a)(4) are felony offenses. A conviction carries felony probation, a maximum fine of 50,000 dollars or twice the fraud amount, whichever is higher, and a jail term of two, three, or five years. 

You will also face a sentence enhancement of twenty-four months for every past felony conviction of auto insurance fraud under PC 550 or 548. And, in case you have any past felony conviction of auto insurance fraud, the judge may not grant you a suspended or probation sentence. 

PC 550, Participating in or Causing an Auto Accident 

Committing car insurance fraud by participating in or causing a car accident is also a felony. It’s punishable by formal probation, a prison term of two, three, or five years, and a maximum fine of 50,000 dollars or twice the fraud amount, whichever is more. These sentencing enhancements will apply if convicted of participating in or causing an auto accident:

  • A possible sentence increment of three years or more if you personally inflicted significant bodily injury upon another person during the causing of the crash
  • Additional two years for every individual other than your accomplish who suffered severe bodily injury due to your actions  
  • An additional five years if you have more than one past felony conviction of automobile insurance fraud by participating in or causing a collision under 550(a)(3) PC
  • Additional two years for every past felony conviction of automobile insurance fraud under PC 550 or 548

PC 550, False Statements 

Violating PC 550(b) subsections (1) to (4) is considered a wobbler offense. This means the prosecuting attorney may opt to charge the actions that fall under this law either as misdemeanors or felonies based on the accused’s criminal history and the details surrounding the crime. 

The felony consequences of violating this law are the same as the consequences for submitting a false or fraudulent insurance claim under 550(a)(4) PC or submitting multiple insurance claims under 550(a)(2) PC. However, if the prosecutor charges your violation as a misdemeanor, the possible consequences you’ll face upon conviction include misdemeanor probation, up to 10,000 dollars in fines, and a maximum of one year in jail. 

PC 549, Accepting, Soliciting, or Referring Car Insurance Fraud Business 

Accepting, soliciting, or referring business from or to a person who aims to commit car insurance fraud is also considered a wobbler offense. The possible felony consequences for this kind of auto insurance fraud include felony probation, a prison term of sixteen months, or two or three years, and a maximum fine of 50,000 dollars or twice the fraud amount, whichever is more. The potential punishments for a misdemeanor conviction are misdemeanor probation, up to 1,000 dollars in fines, and a maximum of a year in jail. 

A second, third, or subsequent violation of PC 549 is always a felony. A conviction is punishable by felony probation, sixteen months or two or three years in prison, and a maximum of 50,000 dollars or twice the fraud amount, whichever is greater. 

551 PC, Kickbacks from Automobile Repair Shops 

Lastly, the type of car insurance fraud that involves auto repair shops giving kickbacks to insurance adjusters, brokers, or agents carries different consequences based on the involved amount of money.  If the kickback amount is 950 dollars or less, you’ll face misdemeanor charges. The penalties upon a conviction include a maximum of six months in jail and up to 1,000 dollars in fines.

If the amount in question is more than 950 dollars, this type of auto insurance fraud is considered a wobbler offense. If you’re charged with a misdemeanor, the possible penalties are up to 1,000 dollars in fines and a maximum of one year in jail. And if charged with a felony, you’ll face sixteen months, two, or three years of a prison term and up to 10,000 dollars in fines upon a conviction. 

Crimes Related to Auto Insurance Fraud

The most common crimes charged alongside auto insurance fraud are: 

Vehicle Code (VC) 10501, Making a False Report of Auto Theft

Falsely reporting a vehicle theft under VC 10501 is an offense that's often prosecuted in relation to auto insurance fraud. You could face charges of this crime if you file or make a fraudulent or false report of a stolen auto with the authorities intending to deceive. Violating VC 10501 is considered a misdemeanor offense. A conviction carries a sentence of up to six months if it's the first offense. Thus, this charge can be a helpful plea deal for more severe automobile insurance fraud charges. 

Healthcare Insurance Fraud

You commit health care fraud when for instance you: 

  • Submit two or more insurance claims for the same medical services
  • Bill an insurance provider for more costly medical services compared to the ones you actually received
  • Bill an insurance provider for medical services you never actually received

PC 550 prohibits types of healthcare insurance fraud that are similar to the types of automobile insurance fraud discussed by the same law. The punishments are also the same. An auto accident, fraudulent or real, may result in both health care insurance and vehicle insurance fraud if you file multiple or fraudulent claims for both medical expenses for the injuries and property damage to the auto due to the accident. 

PC 451, Arson 

You violate PC 451 arson law when you maliciously and willfully set a fire. Should you set fire on your own vehicle intending to obtain auto insurance compensation fraudulently, you will face felony arson charges. If convicted, you will face sixteen months, two or three years in prison. You may also be ordered to pay a fine of 50,000 dollars or twice the amount of the expected financial gain from the vehicle insurance fraud. 

How Auto Insurance Fraud Is Reported 

There are several possible red flags that alert insurance providers to potential fraud. Increasingly, information is gathered and shared in databases that enable insurance investigators to access insurance records, cross-reference historical insurance claims, and record suspicious claims quickly. Losses occurring within a short period of insurance coverage taking effect, multiple claims by one policyholder, increased insurance policies to cover damage or theft shortly prior to the loss occurring, or the same individual repeatedly suffering an accident may alert insurance agents to suspicious claims. 

Additionally, when people with suspicious insurance claims regularly visit the same chiropractor, doctor, and automobile body shop, the insurance provider may be looking for a potential insurance fraud ring. 

Expunging an Auto Insurance Fraud Conviction

Conviction record expungement is available under PC 1203.4 for criminal convictions where no prison sentence is served. A misdemeanor conviction qualifies for expungement, as do many automobile insurance convictions, even if it's a felony since a jail term is imposed rather than a prison sentence. You'll face a prison sentence if you have a past felony conviction for auto insurance fraud, which would disqualify you from expunging your conviction record. 

Find an Experienced Auto Insurance Fraud Defense Lawyer Near Me

The financial strain and stress that accompanies auto insurance fraud accusations can be considerable. More to worry about is the likelihood of a conviction and the incarceration period the judge may impose. However, a skilled lawyer can assist you in building the most compelling defense strategy possible. We at Riverside Criminal Defense Attorney Law Firm have decades of criminal defense experience and understand the consequences of being convicted of auto insurance fraud. We know how to approach the specific case's facts for the highest chance of success, helping our clients avoid incarceration and fines. Contact us at 951-946-6366 if you are facing charges of auto insurance fraud in Riverside for a consultation and learn more on how we'll help you.