Insurance Fraud Laws & Charges
Insurance fraud is making a false claim on an insurance policy of some kind for financial gain. One type is where consumers may misrepresent information to collect money and benefits to which they are not entitled from the insurer, such as in auto insurance or health insurance. Another type is where insurers defraud their customers by denying the benefits to which they are entitled.
There are many types of insurance fraud, but all types may be divided into hard or soft fraud.
This is where someone takes a specific action to defraud. For example, some people may fake a car accident to collect insurance benefits. Or the person might fake a break in to their home so that they can collect on their homeowner’s policy. Or, someone may send false bills to Medicare to receive money from the insurance company. This sort of fraud gets a lot of media attention, as it is quite easy to see and detect. Hard fraud will often involve criminal acts and the intent to steal millions of dollars from insurance firms.
Soft fraud is more ambiguous and harder to see. It often occurs when a person tells small ‘white lies,’ such as adding to an insurance claim by saying they are too sick to work. This allows them to receive worker’s comp.
Worker’s comp is the most common type of soft fraud, and it costs insurance firms a lot of money. This is one of the reasons that health insurance premiums continue to rise.
About Insurance Fraud Laws in Massachusetts
To be convicted in this state, the prosecutor must show that you presented a statement of claim or loss to an insurance company; the statement was false in its content; you knew the statement was not true; and that you intended to deceive the insurer.
Sentences for Insurance Fraud in Massachusetts
According to Massachusetts state law, submitting a fraudulent insurance claim can be punished by up to to five years in state prison, or up to 2.5 years in a house of corrections
Statistics for Insurance Fraud
More than $345 million was ordered in restitution by fraud bureaus in the US in 2010.
Almost 5,000 convictions were obtained for insurance fraud in 2010.
Motor Vehicle Insurance Fraud
Presenting or submitting a fraudulent insurance claim to a motor vehicle insurance company is a crime punishable with imprisonment for up to 5 years in State Prison, or to the House of Corrections for not less than 6 months and up to 2.5 years.
In order to be convicted of the crime of Fraudulent Claims for Motor Vehicle Insurance Policies, the prosecutor must prove, beyond a reasonable doubt:
That the defendant either presented or aided in presenting to an insurance company a notice, statement, or proof of loss in connection with a support of a claim under a motor vehicle insurance policy;
That the false statement was significant to the claim;
That the defendant knew that the statement was false; and
That the defendant intended to injure, defraud or deceive the motor vehicle insurance company.
Massachusetts General Laws Chapter 266, Section 111B, which proscribes the criminal offense of Fraudulent Claims for Motor Vehicle Insurance Policies, covers misrepresentations made in connection with claims under a motor vehicle, theft, or comprehensive insurance policy; whereas the Massachusetts criminal statute for Fraudulent Insurance Claims, General Laws Chapter 266, Section 111A, covers fraudulent claims for all types of insurance.