Auto Insurance Fraud Laws - California Penal Code Sections 548, 549, 550, 551
Auto insurance fraud is covered under California Penal Code Sections 548 thru 551. It’s well known that the state of California requires all drivers to carry insurance and it’s no secret that car insurance fraud in one of the most common types of insurance fraud in Los Angeles County.
There are a wide variety of ways to commit the white collar crime of auto insurance fraud. For example, you could be charged under PC 548 if you damage or abandon your car on purpose with the specific intent to collect car insurance money. Intentionally damaging your car to collect insurance money is one of the most common forms of auto insurance fraud.
You could also face criminal charges if you knowingly submit a fraudulent claim due to alleged damage or theft of your vehicle. Other examples of auto insurance fraud include situations where someone exaggerates the alleged damage on their car, or claim a pre-existing damage on their car when the accident actually did not cause any damage.
Yet more common examples include making multiple insurance claims for the same car accident and some have even staged an accident in order to collect insurance money. There have also been cases where someone will allow a friend to steal their and then claim it was stolen to their insurance company.
Auto insurance fraud in Los Angeles County has been a major issue for insurance companies for decades. As you can see above, there is a wide range of unlawful activity that could lead to some form of auto insurance fraud charges. Under California Penal Code Sections § 548 to 551, most forms of auto insurance fraud are a felony offense, but there are some that are “wobblers,” which means the Los Angeles County prosecutor can file the case as either a misdemeanor or felony crime.
If you are under criminal investigation or already charged with auto insurance fraud, you need to consult with a Los Angele criminal defense lawyer at Eisner Gorin LLP to review the details of your case and to discuss legal options. Now that we have covered a general overview of auto insurance fraud, let’s take a closer look at the various laws below.
The legal definition of vehicle insurance fraud will depend on which specific section of the Penal Code you have been accused of violating.
California Penal Code Section 548
California Penal Code § 548 prohibits damaging, destroying, hiding, disposing, or abandoning a car that is insured against loss or damage with the specific intent to defraud the insurance company or prejudice their investigation.
The “intent to defraud” means that your goal of deceiving the insurance company was to cause a monetary loss or damage to their financial or legal rights. It’s important to note that PC 548 doesn’t require you to actually cause damage to the car or cause a monetary loss to the insurance company.
You could be found guilty of auto insurance fraud if you intentionally attempted to fraudulently collect money from the insurance company and you took direct steps to do so. Additionally, a Los Angeles County prosecutor could even file an auto insurance fraud case even if you never filed a claim, but you damaged the car with the intent to later file an insurance claim for money.
If you are convicted of violating California Penal Code Section 548, you could receive a sentence of two, three or five years in a California state prison and a fine up to $50,000. If you have prior convictions for auto insurance fraud under Penal Code Sections 548 or 550, you will face a two year sentence enhancement for each prior conviction.
Under California Penal Code Section 549, it’s a crime to refer any business, doctor, or private employee with the knowledge they will submit a fraudulent insurance claim. If you are convicted of PC 549, you could face up to three years in jail and a $50,000 fine. Call our Los Angeles criminal defense law firm for more information.
California Penal Code Section 550
California Penal Code § 550 has different subsections that prohibit submitting false insurance claims with intent to defraud the insurance company. Under the legal definition, you could violate PC 550, if any of the following occurs:
- You present or prepare to devise a false written or oral statement on an insurance claim, or in response to a claim for an insurance payment or other type of benefit, when you know your statements are false or misleading concerning the material facts of the case.
- You present, make or prepare a written or oral statement to an automobile insurance carrier for the specific purpose of obtaining car insurance that you live in the state of California, but you actually live in another location.
As you can see above, PC 550 deals with presenting false auto insurance claims with the intent to defraud an insurance company. It should be noted it’s not required that the insurance company actually suffers loss.
It includes making written or oral statements as part of the claim. The legal penalties for a conviction under PC 550 are essentially the same as PC 548 above. However, if you cause a car accident with the intent to defraud a car insurance company, the fine is up to $50,000 or double the fraud, whichever amount is greater.
In addition, if you have two prior convictions for auto insurance fraud by causing a car accident, there is a five year sentence enhancement in a California state prison. If you need additional information, contact a Los Angeles criminal defense attorney at our law firm.
Causing an Accident
California Penal Code Section 550(a)(3) criminalizes the act of causing an accident with the intent to collect insurance money. However, in order for the Los Angeles County prosecutor to obtain a conviction, they must be able to prove, beyond a reasonable doubt, that you caused or took part in causing an auto accident with the specific intent to submit a fraudulent claim for damages to collect insurance money.
Under Penal Code 550, you are considered to have caused the car accident if your conduct resulted in the accident, and it would have not occurred without your actions. If convicted, it’s a felony crime that carries up to 5 years in jail and a fine up to $50,000, or double the amount of the fraud.
Under California Penal Code Section 550(a)(4), you can be charged with auto insurance fraud for submitting multiple insurance claims, if you knowingly submitted more than two claims with the same insurance company, or with several companies, if you had the specific intent to fraudulently collect money from the insurance coverage.
If you are convicted of submitting a fraudulent claim, and submitting multiple claims, its felony crime that carries up to five years in jail and a fine up to $50,000, or double the amount of the fraud, whichever is greater. If you have a prior felony conviction for auto insurance fraud under Penal Code Sections 548 or 550, there is a two year sentencing enhancement.
Business Owners and Employees
Under California’s auto insurance laws, Penal Code Section 551, there are a variety of ways that business owners and employees of car related companies can commit auto insurance fraud. For example, it’s a crime to solicit, accept, or refer any individual or business knowing they have specific intent to commit auto insurance fraud.
Likewise, it’s a crime for an auto repair shop to offer a commission, or any other form of compensation, to an insurance adjuster or broker in an exchange to refer a insurance policy holder to the repair shop for issues that are covered by the auto insurance company.
A common example in Los Angeles County includes a situation where the owner of an auto repair shop asks a relative, who happens to be an insurance adjuster, to refer his auto repair business to their insurance holders. In exchange, he will give his relative a portion of the money he receives from the business.
In this situation, the auto repair shop owner could be found guilty of auto insurance fraud for profit-sharing from auto insurance customers. The legal penalties will depend on the amount of the kickback. If $950 or less, it’s a misdemeanor crime carrying a sentence of up to one year in county jail and a $1,000 fine.
If the amount is more than $950, it’s a wobbler, meaning the Los Angeles County prosecutor can file the case as either a misdemeanor or felony offense. A felony conviction carries up to three years in jail and a $10,000 fine.
Related Auto Insurance Fraud Offenses
California Penal Code 548 - Damaging or Abandoning a Vehicle
California Penal Code Section 550 – Health Care Fraud
California Penal Code Section 451 – Arson
California Insurance Code 1871 – Workers Compensation Fraud
California Vehicle Code 10501 – False Report of Vehicle Theft
As you can see above, most types of auto insurance fraud cases are a felony crime, but there are a few “wobblers.” For example, if you prepare or submit a false statement, it can be charged as either a misdemeanor or felony crime.
Felony convictions for auto insurance fraud can carry up to a five year prison sentence and a huge fine of up to $50,000, or twice the amount of the fraud. Misdemeanor auto insurance fraud convictions carry a jail sentence of up to one year and a $1,000 fine.
There are a wide range of potential legal defenses for our Los Angeles criminal attorneys against auto insurance fraud charges. Every case is unique and first requires a thorough examination of the specific details to formulate a strategy. However, the most common legal defenses against all forms of auto insurance fraud charges under California Penal Code Sections 548 thru 551 include the following:
No intent to commit auto insurance fraud – It’s important to remember that the Los Angeles County prosecutor has to be able to prove, beyond a reasonable doubt, you specifically intended to commit auto insurance fraud.
This element of the crime is vital in proving all types of fraud cases. Our lawyers might be able to successfully argue you simply made a careless mistake that was misinterpreted by the insurance company. If we are able to cast doubt on the intent, you can most likely avoid a conviction.
Insufficient evidence – Some types of auto insurance fraud cases can be complicated and difficult to prove as they will involve large amounts of paperwork and circumstantial evidence. Our criminal lawyers may be able to find holes in the prosecutor’s evidence and cast the all important reasonable doubt.
Again, every case is unique requiring a close look at their evidence before creating a defense plan. Our goal is to cast doubt. If successful, you can probably avoid or conviction or have the charges reduced.
Contact our Los Angeles Criminal Attorneys
If you have been accused of auto insurance fraud, contact our Los Angeles criminal defense law firm of Eisner Gorin LLP immediately. A conviction carries harsh legal consequences and huge fines.
If contact by an auto insurance company investigator or police detective, politely decline to answer their questions without first speaking with an attorney. We offer a free immediate response. Contact us at 877-781-1570.