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Auto Insurance Fraud

Auto Insurance Fraud in California - Penal Code 548-551 PC

Auto insurance fraud is widespread in California and carries harsh penalties if you are convicted. The crimes that fall under this type of fraud are defined under California Penal Codes 548-551 PC.

There are numerous ways to violate the auto insurance fraud laws, including Penal Code 548 PC damaging or abandoning your car to collect insurance money.

Auto Insurance Fraud in California - Penal Code 548-551 PC

Further, you can also be charged if you knowingly submit a fraudulent claim regarding damage or theft of your vehicle. Yet another type of car insurance fraud includes lying about the alleged new damage on your car when it was pre-existing damage.

Making multiple insurance claims for the same accident, staging a car accident, or having somebody steal your car with the intent to collect insurance money are all considered a form of auto insurance fraud.

Auto insurance fraud in Los Angeles County is a significant problem for insurance companies. Most auto insurance fraud cases are filed as felonies, but some are wobblers that can be charged as misdemeanors, depending on different factors.

A conviction can result in jail time, fines, probation, and restitution to the insurance company. Our California criminal defense attorneys will review these laws in more detail below.

Penal Code 548 PC - Damaging or Abandoning a Vehicle

It's a felony crime to deliberately damage, destroy, or abandon a vehicle to make an insurance claim. For example, using a baseball bat to damage a vehicle and claiming it was vandalized. Another example includes hiding your car and claiming it was stolen to collect the insurance money.

PC 548 does not require that you commit unlawful acts on our car. Instead, you could be found guilty of auto insurance fraud if you intentionally attempt to collect the money you are not entitled to receive from an insurance company fraudulently and take immediate steps to complete it.

Penal Code 549 PC - Referring a Business to Engage in Auto Insurance Fraud

It's also a crime to refer someone to an auto repair shop when you know they submit fraudulent insurance claims.

Further, it's a crime for this type of shop to solicit somebody for their business for claims fraud. PC 549 is a "wobbler" that can be charged as a misdemeanor or felony.

An example includes a situation where you send a friend to a car mechanic you know will file a fraudulent insurance claim and then give you a portion of the money.  If convicted of violating PC 549, you could face up to three years in jail and a $50,000 fine.

Penal Code 550 PC - Submitting Fraudulent Insurance Claims

This law has various subsections that make it a crime to submit false insurance claims with the intent to defraud. In other words, it's a crime to knowingly submit a fraudulent insurance claim and related conduct, such as:

  • File an insurance claim you know is false;
  • Staging an accident to collect insurance money;
  • Giving false information to an insurance company to justify a false claim;
  • Lying about where you live to get a lower insurance rate;

Readers should note that the insurance company does not have to sustain a loss. In other words, just the attempt to defraud is sufficient. This statute also covers making a written or oral statement as part of the claim.

PC 550 is usually charged as a felony, but making false statements is a wobbler. If you caused an accident with the intent to defraud the insurance company, the fine is generally up to $50,000 or double the fraud, whichever amount is more significant. 

If you have prior auto insurance fraud convictions, you could face a five-year sentencing enhancement.

Penal Code 551 PC - Illegal Referrals to Auto Repair

It's a crime for auto repair shop owners or employees to solicit referrals for kickbacks. PC 551 can be charged as a misdemeanor or a felony for any loss that exceeds $950.

An example is when an auto shop owner offers an insurance agent money or something of value for every client they refer to their shop.

The related offenses for auto insurance fraud include Penal Code 451 PC arson and Vehicle Code 10501 and false report of vehicle theft.

What are the Penalties If Convicted?

As discussed above, most forms of auto insurance fraud crimes can be charged as misdemeanor or felony offenses.

The prosecutor will use several factors to determine how they will file the case, such as the crime's nature, prior convictions, and the level of alleged corruption.

If convicted of misdemeanor insurance fraud, you will face up to one year in county jail and $1,000 in fines. A felony insurance fraud conviction carries up to five years in prison and $50,000 in fines.

Any prior fraud-related convictions could add an extra two years per crime. Further, if you are convicted, you will usually be ordered to pay restitution to the insurance company you defrauded.

What are the Best Legal Defenses for This Crime?  

The most significant factor that prosecutors must be able to prove, beyond a reasonable doubt, is intent to defraud. Put simply; it must be shown that you knew what you were doing was wrong and your actions had the specific purpose of money fraudulently obtaining money.

Thus, a common defense strategy against auto insurance fraud charges is to make an argument that you didn't have the intent to defraud the insurance company. Perhaps there is a valid and innocent explanation.

Best Legal Defenses for Auto Insurance Fraud

Perhaps you accidentally broke your car window and incorrectly assumed it would be covered under your policy. Maybe you made an honest mistake on the insurance claim. If we can cast doubt on the critical issue of intent, you should have a good chance of avoiding a conviction.

Perhaps we can argue that there is insufficient evidence for a conviction. Many car insurance cases are complex and challenging to prove due to the many documents in the case, which are often circumstantial evidence.

Perhaps we could negotiate for reduced charges or avoid the formal filing of criminal charges through prefiling intervention, called a “DA reject.”

Cron, Israels & Stark is located in Los Angeles County, California. You can contact our law firm for a free case evaluation by phone or fill out the contact form.

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