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Submitting Fraudulent Insurance Claims in California - Penal Code 550 PC

The Crime of Insurance Fraud in California - PC 550

California Penal Code 550 PC describes the crime of insurance claims fraud. Generally, this statute is used to prosecute anyone who knowingly submits false or fraudulent claims for insurance reimbursement. 

The specific details of insurance fraud can vary tremendously. For example, Penal Code 550 PC covers submitting a false or fraudulent claim for:

Submitting Fraudulent Insurance Claims in California - Penal Code 550 PC
Penal Code 550 PC describes the crime of insurance claims fraud and described as knowingly submitting fraudulent claims for reimbursement.
  • injury or property damage,
  • presenting multiple claims for the same loss, (i.e. to different insurers),
  • causing or participating a vehicular accident for the purpose of presenting a false insurance claim, and
  • making false statements on a claim based of purported theft or destruction of, or damage to, a vehicle.

Typically, insurance claims fraud cases are filed after a defendant makes a material misrepresentation during the claims process. 

When is a “Misrepresentation” in a PC 550 Insurance Fraud Case Important?

A “misrepresentation” is material in insurance fraud cases if a falsely reported fact is important to the amount of loss, or determining liability. 

Not all facts that are reported in an insurance claim about an incident are material. 

For example, if a valid insurance claim included details about where the defendant was travelling at the at time of an auto collision, when in fact it was determined later to be false, the claim would not have any consequence and the defendant would not be charged.

However, any details of the incident that can:

  • affect the responsibility of the insurer, or
  • the amount of the claimed loss;
  • will be considered “material,” and;
  • likely to result in a Penal Code 550 PC insurance fraud criminal case being filed.

Example of insurance fraud

For instance, if an auto collision results in $15,000 of property damage that was estimated by a body repair shop, but a defendant submits a claim for $50,000 knowing that actual loss amount is much less, then we would expect a them to face a criminal court filing of insurance fraud under Penal Code 550 PC.   

What Conduct is Prohibited Under Penal Code 550 PC?

California Penal Code 550 PC makes it a crime to knowingly submit false insurance claims, but it's also criminalizes someone from knowingly:

What Conduct is Prohibited Under California Penal Code 550 PC?
Under Penal Code 550 PC insurance fraud laws, it's a crime to present false information on loss for theft or car damage.
  • presenting multiple claims for the same loss,
  • staging a car accident to submit a false insurance claim,
  • presenting false information on loss for theft or car damage,
  • make any false statements when submitting an insurance claim,
  • make false statements for payment of heath care benefits.

What are the Penalties for PC 550 Insurance Fraud?

A violation of Penal Code 550 PC insurance fraud is generally a felony, punishable by:

  • two, three, or five years in a county jail following re-alignment,
  • a fine of up to $50,000, or double the amount of fraud.

What are the Related California Offenses?

  • Penal Code 548 PC – damaging or abandoning a vehicle
  • Penal Code 549 PC – soliciting auto insurance fraud business
  • Penal Code 551 PC – auto repair shop kickbacks

How Can I Fight Insurance Fraud Charges?

If you were accused of violating California Penal Code 550, our Los Angeles criminal defense lawyers can use different strategies in an effort to get the charges reduced or dismissed, including:

  • lack of knowledge;
  • good-faith disagreement;
  • false allegation.

A common defense which recurs in insurance claims fraud cases is the defendant didn't knowingly misrepresent the facts on which the claim was based. 

How Can I Fight Penal Code 550 PC California Insurance Fraud Charges?
Our criminal defense lawyers can use a variety of strategies in an attempt get the charges reduced or dismissed.

For example, in the example discussed above, if you claimed $50,000 due to the fact the body repair shop was incompetent, then you shouldn't be held liable for PC 550 insurance fraud because insurance company obtains a lower estimate.

Thus, the claimed amount was factually incorrect, but you had no reason to believe you were knowingly submitting a false claim, rather you were simply mistaken.

Good-faith disagreement

On a similar note, there might be a good-faith disagreement on the scope of the coverage on the insurance policy.

Depending on the policy, the individual who was insured might believe a given incident should be covered and so they submitted a valid claim for reimbursement. However, the fact is the insurance policy actually excluded that type of loss or injury.

This means we could make a reasonable argument you did not knowingly submit a false or fraudulent claim. Rather, you had a good-faith civil dispute with the insurance company over extent of coverage that can be resolved outside of criminal court.

False allegation 

Insurance companies have a vested interest in denying claims, especially when they could result in a large payout. A common justification for denying a claim for reimbursement is to make a false claim of fraud against the insured party.

There are many insurance companies with Special Investigations Units that work closely with the California Department of Insurance. Their primary function is to report and investigate suspected insurance claims fraud, such as application fraud.

We have had prior PC 550 insurance fraud cases that we successfully argued in court that the insurance company mischaracterized a bona fide dispute over coverage between insurer and insured in an attempt to avoid paying on a large claim.

Contact Eisner Gorin LLP If Charged with Insurance Fraud

If you or a family member has been charged with insurance claims fraud defined under California Penal Code 550 PC, our experienced Los Angeles criminal defense attorneys can help you maximize your chances for a favorable outcome.

Contact Eisner Gorin LLP If Charged with Insurance Fraud
Contact our criminal defense law firm to review the details of your insurance fraud case.

Prefiling intervention 

We specialize in defending criminal charges while they are under investigation, before formal charges have been filed in court, in an effort to get the charges reduced or dismissed through a prefiling intervention

Even if the insurance fraud case is formally filed, there are several opportunities for a successful resolution to the case. This could occur through a negotiated settlement with the prosecutor, or through litigating at the preliminary hearing or at a jury trial.

Eisner Gorin LLP is a criminal defense law firm located at 1875 Century Park E #705, Los Angeles, CA 90067. Our main office is next to the Van Nuys Court at 14401 Sylvan St #112 Van Nuys, CA 91401.

Contact our office to review the details of your case at (877) 781-1570.

We speak English, Russian, Armenian, and Spanish.

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