What Is Insurance Fraud, and How Can You Be Charged? | White Collar Crime Lawyers, Wichita

WICHITA, Kan., Sept. 5, 2024 /PRNewswire/ -- According to the Federal Bureau of Investigation, the total cost of insurance fraud is estimated to be more than $40 billion per year. Insurance fraud affects not only the insurance industry but also policyholders, who end up paying higher premiums (between $400 and $700 annually per U.S. household) as a result. Don't get caught up in an insurance scheme—our white collar crime lawyers in Wichita, Kansas, at the McConnell Law Firm are detailing everything you need to know about insurance fraud. Keep reading to learn more!

What Is Insurance Fraud?

Insurance fraud is considered a form of white collar crime in which a claimant seeks insurance compensation for a falsified claim (something that hasn't occurred or has occurred under false pretense). When it comes to such activities, insurance fraud generally falls into two broader categories—hard fraud and soft fraud.

• Hard Fraud occurs when someone deliberately plans or invents a loss, such as faking an accident or injury, to collect money from an insurance company.

Let's See an Example: A claimant stages a car crash and then submits a false claim to collect on the policy.

• Soft Fraud is more subtle and often involves inflating or exaggerating an otherwise legitimate claim.

Let's See an Example: A homeowner who experienced a minor flood might add a few extra items to the list of damaged goods in hopes of receiving a larger payout from the insurance company.

How Can I Be Charged?

While misrepresentation of claims remains one of the most common forms of insurance fraud, you could be charged as a result of various different activities. Some other activities that may cause individuals and businesses to face charges include:

Filing False or Exaggerated Claims

Filing false or exaggerated claims could involve anything from reporting a nonexistent theft and exaggerating the extent of an injury to submitting claims for damage that was intentionally inflicted. Insurance companies often conduct their own investigations into claims, and if discrepancies are found, they may be reported to law enforcement, leading to fraud charges.

Intentionally Providing False Information

Falsifying information on an insurance application is a serious offense that can result in insurance fraud charges. Providing incorrect details about your health, lifestyle, or the value of property or assets in an attempt to secure lower premiums or higher payouts can quickly lead to criminal charges.

Working With Co-Conspirators

In some cases, insurance fraud involves more than one party. For example, an individual might work with a doctor to submit fraudulent medical claims or with a mechanic to inflate the cost of auto repairs. Make no mistake—these co-conspirators can also face criminal charges.

Engaging in Fraudulent Billing Practices

Individual claimants aren't the only ones who may face criminal charges due to insurance fraud; businesses can also be charged for fraudulent billing practices. This might involve charging insurance companies for services that were never rendered or inflating the cost of services that were performed. Because insurance companies often audit providers' billing practices, extensive discrepancies can lead to criminal investigations.

Understanding Legal Penalties

In the state of Kansas, insurance fraud is typically classified as a felony unless the amount involved is less than $1,000, in which the act is considered a class C nonperson misdemeanor. Depending on the severity of the fraud and the amount involved, consequences will vary; however, typical penalties include:

Prison Time—Convictions for insurance fraud may result in significant prison sentences, especially for large-scale or repeated fraud.

Fines—Fines can be substantial, sometimes amounting to thousands of dollars, depending on the case.

Restitution—Courts may order those convicted of insurance fraud to repay the money they illegally obtained, plus interest.

Loss of Professional Licenses—Healthcare providers, attorneys, and other professionals who commit insurance fraud may lose their licenses, barring them from continuing their work.

Have You Been Accused?

If you are facing fraud charges, we encourage you to contact the McConnell Law Firm as soon as possible. While every case is different, and no conclusions should be drawn without first consulting one of our white collar crime lawyers in Wichita about the specifics of your case, it is always in your best interest to have a skilled attorney by your side from the beginning.

Request a Free Consultation

Do you or a loved one need the assistance of an experienced white collar crime lawyer in Wichita? We encourage you to contact the McConnell Law Firm at (316) 243-5903 for a free consultation.

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SOURCE McConnell Law Firm