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Auto Insurance Fraud Defense Attorney in California

There are many distinct types of auto insurance fraud. It generally consists of intentionally misleading an insurance company to save money on premiums or to obtain money to which the insured or other person participating in the fraud is not entitled. Although his definition appears uncomplicated, it includes many different acts that fall into the general category of insurance fraud.

Different Types of Car Insurance Fraud

The easiest way to understand auto insurance fraud in California is to divide it into two groups. Known as “hard fraud” and “soft fraud,” these categories include the most common types of insurance fraud:

  • Hard Fraud. Hard fraud is the most obvious type of illegal behavior used to obtain money from an insurance company. Examples include the intentional abandonment, sale, or destruction of a vehicle, followed by a claim under an insurance policy that the vehicle was stolen. Hard fraud also covers staged collisions, arranging to have a witness to the “accident” provide false information concerning the nature of the collision, and injury fraud, where the person exaggerates or simply fabricates their injuries.
  • Soft Fraud. Soft fraud usually involves overstating (“padding”) claims or making false statements (or withholding information) in order to inflate the loss and increase the payout by the insurance company, or to obtain a lower rate for the insurance. This can be accomplished in a number of ways, such as exaggerating the claim, for example, by including pre-existing damage in a new claim; lying on the application for insurance (withholding information or providing false information) to obtain a lower rate; or overstating the value of your vehicle.

The insured party is not the only person who may be accused of auto insurance fraud. Here are a few examples: body shops that use secondhand parts, while claiming to use new ones; shops that charge for replacement of airbags that are not damaged or defective; and windshield fraud, involving scams that begin with a “repair specialist” who claims that your windshield needs replacement.

California Criminal Law and Auto Insurance Fraud

There are several statutes in the California Penal Code that cover the issue of insurance fraud. They are PC 548 through PC 551:

  • PC 548. This section deals with hard fraud described above, involving the destruction, abandonment, etc. of a property (in the case of auto insurance fraud a vehicle) with intent to defraud the insurer. It is a felony punishable by 2, 3 or 5 years in prison and a fine of up to $50,000.
  • PC 549. The statute makes it illegal to refer, solicit or accept business from anyone who has knowledge that the other person/business intends to commit insurance fraud under PC 550. Violation of PC 549 is a wobbler, although a second or subsequent conviction is a felony.
  • PC 550. This section lists numerous ways in which insurance fraud may be accomplished. Regarding auto insurance fraud, the list covers, among other things:
  1. false or fraudulent claims for losses or injuries.
  2. multiple claims for the same loss or injury.
  3. participating in a collision to present a false insurance claim.
  4. presenting a fraudulent claim for loss, damage, theft, or destruction of a motor vehicle.
  5. submitting (or subscribing to) any written document intending to use it (or allowing it to be used) in to support a fraudulent insurance claim.
  6. presenting any knowingly false statement, written or oral, or failure to disclose a material fact, for insurance benefits.
  • Other acts are also prohibited under the statute. Many are felonies.
  • PC 551. Briefly stated, this statute makes it a crime for auto repair shops and dealers, and their employees, to offer an insurance agent a referral fee for repairs. It also prohibits auto repair shops from providing discounts to offset insurance policy deductibles. For amounts over $950, it is a felony.
  • The upshot of this is that there are many different acts that can lead to an auto insurance fraud charge, and if you are convicted, the penalties are severe.

    Defending Auto Insurance Fraud in Los Angeles

    While there are many different potential charges relating to auto insurance fraud in California, there are also defenses available that could lead to a dismissal of the case against you.

    Note that in virtually every section of the Penal Code noted above, the law requires, in order for a case to be proven against you, that the state show you knew of the alleged falsehood, or the scheme attempted to be carried out against the insurer or others. Mistakes, lack of understanding, and being provided with erroneous information can all lead to errors that may look, at first glance, like fraud, but that lack the essential elements of knowledge and/or intent in order to prove the case against you.

    At CBS Law, we represent clients charged with serious criminal offenses. We understand the pressure you are under when charged with a crime that threatens your freedom and your future. Contact our office today to find out how we can help in your case (213) 800-8005

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