Insurance companies are not the only ones feeling the financial effects of insurance fraud. The billions of dollars that insurance companies payout each year in fraudulent claims eventually impacts consumers in the form of higher insurance premiums.
Most people associate a fake injury or a staged accident with insurance fraud schemes, but overlooked forms of fraud include:
It is the little lies that people tell insurance companies that add up to big losses due to fraud. Because of this, the insurance industry has lobbied state lawmakers to pass laws making insurance fraud a serious criminal offense.
One of the most commonly committed forms of insurance fraud occurs when a homeowner or renter has loss because of a fire or theft. Inflating the value of personal property damaged in a fire, or claiming the theft of items that a person never owned are things people do without considering the consequences.
The preparation of an insurance claim that a person knows to be false or misleading could be enough to result in a criminal conviction and harsh penalties. For example, lying on an insurance claim can be a felony in Texas under the state’s penal code. The punishment for a conviction could be a minimum prison sentence of two years and a $10,000 fine.
Owners of cars, trucks or motorcycles who misrepresent the mileage on their vehicles are engaging in a form of insurance fraud. Making it impossible for an insurance company to know how many miles a vehicle is driven by disconnecting the odometer cable is another form of conduct that constitutes insurance fraud.
A person injured in an auto accident that lies about the seriousness of the injuries or provides false information about time lost from employment is engaging in fraudulent conduct. Encouraging a mechanic or body shop owner to inflate the cost of repairs of a vehicle damaged in an accident is a form of fraud.
Another form of insurance fraud in Texas and other states is submitting a false statement in support of an application for a life insurance policy. Examples of statements that people make on an insurance application that could be prosecuted as fraud include:
The costs attributed to fraud are so high that insurance companies devote considerable time and money to investigating people suspected of filing fraudulent claims or applications. The criminal penalties imposed by state laws make insurance fraud a risky activity. If you have engaged in behavior that might be considered insurance fraud, then it is best to consult with a legal representative so he can review your case and determine the best plan of action. Allow Rand Mintzer to help you by calling 713-862-8880 today.