How Do I Know If I’m Committing Insurance Fraud?
After getting into a car accident a few months ago, your injuries caused you to miss some time at work. Confiding in your friend that you are now facing financial difficulties because of the lost wages, your friend suggests that you tell the insurance company your injuries are more severe than they were. Sounds like a solid plan, right?
Before you continue, maybe you should learn a thing or two about insurance fraud.
Hard vs. Soft Insurance Fraud
As mentioned in the previous blog, New Jersey law describes insurance fraud as making or causing false or misleading statements to the insurance company. There are two types of fraud — hard and soft fraud.
Hard fraud occurs when someone fakes an accident or injury to collect money illegally from the insurance company. For example, you stage an elaborate car accident then file a claim with your insurance company to recoup the damages.
Soft fraud does involve legitimate losses; however, these losses have been exaggerated for financial gain. The scenario above is a classic example of soft fraud – there is some truth in your statements, but because you exaggerated your injuries, this is considered soft fraud.
The Penalties for Fraud
Insurance fraud is a third-degree indictable crime in New Jersey. If charged, you will be facing a $10,000 fine and up to 18 months in jail. If there are multiple instances of fraud, then you could be facing a second-degree offense with stricter penalties.
And remember, your crime will hurt those who have insurance. According to the Federal Bureau of Investigation, fraud is estimated to be more than $40 billion a year. That means it costs the average U.S. family between $400 and $700 per year in increased premiums.
Individuals Are Not the Only Ones Committing Fraud
Consumers are not the only ones who commit insurance fraud. In some cases, providers, adjusters, and even insurance companies have been known to commit fraud. But did you know that the individual can receive an award if you know of fraud?
According to New Jersey’s Office of the Insurance Fraud Prosecutor, any individual reports fraud in good faith and without malice, will not only have immunity from civil lawsuits but may be eligible to receive an award if the tip leads to an arrest and conviction.
How The Law Offices of Anthony Carbone Can Help
For more than 30 years, the Law Offices of Anthony Carbone has been helping individuals throughout New Jersey with insurance claims. If you’re unsure if you are committing fraud, contact our Jersey City office for advice.