Insurance Fraud: What It Is, What The Penalties Are, & How It Affects You

Insurance fraud is a serious offense with significant consequences for individuals and society. According to the Federal Bureau of Investigation, insurance fraud costs the United States and its citizens over $40 billion a year in increased insurance premiums.

The Office of Attorney General’s Insurance Fraud Section in Pennsylvania can investigate and prosecute insurance fraud. Their dedicated efforts ensure that fraudulent practices are thoroughly addressed.

This blog post will explore the ins and outs of insurance fraud in Pennsylvania, including what fraud costs businesses and how insurance company employees are combating fraud. We’ll discuss the charges for suspected fraud and the penalties for this serious crime. Additionally, we will discuss the impact of this type of crime on your future.

If you have been charged with this type of crime, don’t face the courts alone. Get help from our insurance fraud attorney at Marinaro Law Firm today! We’ll prepare for a courtroom battle from day one and fight for you to get the best possible outcome from your trial. Contact us now to get started.

What Is Insurance Fraud in Pennsylvania?

In the Commonwealth of Pennsylvania, insurance fraud is defined as any intentional act, committed to obtain a fraudulent outcome, such as financial gain, from an insurance process. Insurance fraud includes not only submitting false or exaggerated claims but also manufacturing false insurance documents, misrepresenting facts on insurance applications, staging accidents, and even exaggerating the extent of damage or loss.

Insurance Fraud Can Go Both Ways

Insurance fraud is filing false claims for damages or injuries that never occurred and having the insurance company pay claims due to it. However, it can also be committed by both claimants and insurers.

For instance, an insurance company or insurance agents can commit fraudulent activities such as denying a due claim or changing policy terms without prior notification. When perpetrated by insurance companies, it could manifest as the provider deliberately misleading policyholders about policy details or deliberately underpaying claims.

Insurance fraud financially impacts consumers and the insurance company industry as a whole, leading to increased premiums for honest policyholders who file legitimate claims. It also undermines the trust between insurers and policyholders, which is essential for the functioning of any insurance company. While law enforcement agencies and government agencies across the Commonwealth work together to combat fraud, billions of dollars are lost annually.

What Are The Types of Insurance Fraud in PA?

There are a few kinds of insurance fraud cases in Pennsylvania. Here are some examples of individuals committing fraud for insurance purposes:

• Auto Insurance Fraud: These types of insurance fraud cases involve staging accidents, submitting claims considered exaggerated, or reporting auto theft when that is not the case to collect insurance money.

• Health Insurance Fraud: Health care fraud is when providers commit fraud by billing for services not rendered, inflating charges, or patients using someone else’s identity to acquire medical services.

• Property Insurance Fraud: These types of insurance frauds include purposely damaging property to make a claim, exaggerating the value of lost or damaged items, or making false statements that lead to untrue claims filed about theft.

• Life Insurance Fraud: When you commit insurance fraud with life insurance, it could involve faking one’s death or the death of a beneficiary to receive the insurance payout or misrepresenting health conditions for lower premiums.

• Workers’ Compensation Fraud: In this case, an employee might exaggerate or fabricate injuries to receive workers’ compensation benefits, or an employer might underreport payroll to lower insurance premiums.

What Are The Penalties For Committing Insurance Fraud in PA?

Similar to other fraudulent crimes in Pennsylvania, insurance fraud is not taken lightly in a court of law. If found guilty on the criminal side, it is classified as a felony of the third degree, carrying significant consequences. These repercussions can result in imprisonment of up to seven years and a substantial fine of up to $15,000. Without help from financial fraud lawyers, your case could be tried in criminal court and civil as well.

Insurance companies are not passive in addressing claims fraud. Insurers fight fraud by taking civil action to recover the funds from paying claims, ensuring that those who attempt deliberate deception of the system face financial consequences as well.

This approach by insurance companies serves as an additional preventive, protecting the integrity of the insurance industry and the interests of their customers who seek to file a legitimate claim through their insurance policy.

The Life-Long Impacts of Fraud Charges

In addition to these civil and criminal penalties, fraud charges can impact your personal and financial well-being. Understanding the gravity of this type of white-collar crime is crucial since it can have various negative impacts on your future.

For example, if you’re convicted of a third-degree felony in Pennsylvania for making fraudulent claims in the insurance process, you lose the legal ability to do the following:

• Vote
• Own a firearm
• Run for office
• Apply for student loans
• Practice under certain state licensures

Financial Fraud Lawyers on Your Side at Marinaro Law Firm

When it comes to finding the right financial fraud lawyers for your case, turn to our dedicated, loyal, and experienced team at Marinaro Law Firm. We’re here to ensure your insurance fraud trial is fair and will fight for the best possible outcome. If you’re ready to call on expert criminal lawyers in Lancaster, PA, for your case, contact us today.

RESOURCES:

• FBI.gov – Insurance Fraud
• National Association of Insurance Commissioners – Insurance Fraud
• Insurance Information Institute – Background on: Insurance fraud
• Progressive – What is insurance fraud?
• PACS, Title 18: Crimes and Offenses; Chapter 1: General Provisions, § 106. Classes of offenses.
• PACS, Title 18: Crimes and Offenses; Chapter 41: Forgery and Fraudulent Practices, § 4117. Insurance fraud.
• Pennsylvania Attorney General Michelle A. Henry: Get Help – Insurance Fraud