Insurance fraud takes many forms, ranging from individual false claims to large-scale, organized crime rings. Under California law, fraud occurs whenever someone knowingly makes a false or misleading statement, conceals material information, or engages in a deceptive act with the intent to obtain insurance benefits or reduce premium costs unlawfully.
Some of the most common types of fraud cases include:
-
Falsifying Claims
- Submitting a claim for damage or loss that never occurred, or exaggerating the extent of an actual loss.
- Example: Claiming that stolen items included jewelry or electronics that never existed.
-
Staged Accidents
- Intentionally causing or fabricating an accident to collect insurance benefits.
- Example: “Swoop and squat” auto fraud schemes where fraudsters deliberately cause a rear-end collision to file injury claims.
-
Inflated Repair Bills
- Service providers (such as auto body shops or contractors) inflating the cost of repairs, charging for unnecessary work, or billing for work never performed.
-
Faked Injuries or Illnesses
- Claimants fabricating medical conditions, exaggerating injuries, or extending disability claims longer than necessary.
- Example: A person claiming permanent disability while secretly working another job.
-
Misrepresenting Facts on Applications
- Providing false information when applying for coverage, such as concealing medical history, misrepresenting vehicle usage, or underreporting payroll for workers’ compensation.
- Example: An applicant for life insurance failing to disclose a chronic illness.
