California Penal Code Sections 548, 549, 550 and 551 PC: Auto Insurance Fraud

1. Definition and Elements of the Crime

auto insurance fraud

Because every driver is required to carry automobile insurance, it is no surprise that car insurance fraud is one of the most common forms of insurance fraud committed. California Penal Code Sections 548, 549, 550 and 551 PC makes it illegal to file a fraudulent claim with a car insurance company.

In general, auto insurance fraud requires a prosecutor to establish the following elements:

  1. The defendant knowingly submitted a fraudulent claim to his or her auto insurer
  2. AND he or she did this with the intent to defraud the company.

Auto insurance fraud can be committed in the following ways, each of which are covered by a specific statute:

  1. California Penal Code Section 548 PC – Under this statute, it is illegal to purposefully damage, abandon or dispose of an automobile in order to submit a claim with an auto insurance company.
  2. California Penal Code Section 549 PC – Under this section, it is a crime to refer someone to an auto repair shop or doctor knowing that the professional would submit a fraudulent auto insurance claim
  3. California Penal Code Section 550 PC - This statute covers the following unlawful conduct:
    1. Knowingly submitting a fraudulent insurance claim
    2. Creating or signing a document in support of a false insurance claim
    3. Staging an accident in a scheme to defraud an auto insurer
    4. Claiming to live in another city or state to falsely obtain a less expensive auto insurance policy rate
  4. California Penal Code Section 551 PC - This makes it illegal for auto repair professionals to pay insurance agent for customer referrals.

2. Related Offenses

Other similar or related offenses include:

  1. Auto Insurance Fraud - California Insurance Code Section 1872.8
  2. Petty Theft - California Penal Code Section 484 PC
  3. Grand Theft - California Penal Code Section 487 PC

3. Examples

A man takes his car and pushes it off of a cliff into a deep ravine. He then calls his insurance carrier and reports that his car was stolen and demands compensation. The man could be prosecuted for auto insurance fraud due to his scheme to defraud his insurer.

In another example, a man wants to save money on his auto insurance policy so he lies about where he lives. This man has committed auto insurance fraud and could be prosecuted under California Penal Code Section 550 PC.

4. Defenses to Auto Insurance Fraud

If there was no intent to defraud the insurer, then there would be no criminal liability under the auto insurance fraud statute. This could occur when a person submits a claim after a car accident and does not realize that some of the damage occurred from an earlier incident. Because the person did not intend to deceive his insurer, he did not commit a crime even though he technically submitted a false claim.

5. Penalties

Auto insurance fraud is a “wobbler” offense that can be charged as either a felony or a misdemeanor, depending on the particulars of the fraud offense and the defendant’s criminal history. If charged as a misdemeanor, the defendant can be sentenced to up to six months in jail, fines and restitution to the insurance company. If filed as a felony, the defendant can be sent to prison for up to five years with an additional two years for each prior conviction the defendant may have for auto insurance fraud.

6. Criminal Defense for Auto Insurance Fraud

If you have been contacted by your car insurer or an investigator from the California Department of Insurance in regards to suspicious activity on your policy or claim, it is very important that you discuss your options with a Los Angeles Criminal Defense Lawyer right away. Los Angeles Criminal Defense Lawyer Michael Kraut is a former Deputy District Attorney with over 14 years of prosecutorial experience who previously handled white collar offenses as part of the Los Angeles County District Attorney’s elite Major Fraud Unit. Mr. Kraut is highly experienced at defending auto insurance fraud cases and can often intervene before charges have been filed to attempt to have charged reduced or even dropped entirely.

For more information about auto insurance fraud, and to schedule your free consultation, contact Los Angeles Criminal Defense Attorney Michael Kraut at the Kraut Criminal & DUI Lawyers located at 6255 Sunset Boulevard, Suite 1520, Los Angeles, CA 90028. Mr. Kraut can be reached 24/7 at 888-334-6344 or 323-464-6453.

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