Insurance fraud is not just a civil issue—it carries serious criminal and regulatory penalties in California. The California Insurance Code, together with the Penal Code, clearly outlines the consequences for making, assisting, or even attempting fraudulent acts in connection with insurance.
Perjury in Insurance Claims: Under CIC §§1871.2–1871.3, signing a fraudulent insurance application or claim form is considered perjury, since claim forms typically require the applicant’s sworn statement of truth.
Criminal Charges: Fraud can be prosecuted as either a felony or misdemeanor, depending on the severity of the case. Penalties may include:
Defined in CIC §§1871 and 1871.4: This article establishes what constitutes a false or fraudulent claim and sets the framework for penalties. Fraud is broadly defined to include:
Applies to All Lines of Insurance: Fraud provisions are not limited to auto or health insurance—they apply equally to life, property, casualty, workers’ compensation, and disability coverage.
Proactive Fraud Prevention: These statutes also encourage insurers, agents, and brokers to implement anti-fraud measures, such as training, SIUs, and fraud detection systems.
Fraud isn’t just an ethical violation—it’s a crime with potentially life-changing consequences.