You Can Go to Jail for Insurance Fraud

Last week, we presented several examples of insurance fraud to educate our readers.  We want to make the point behind our focus.  In short, you can go to jail for insurance fraud.  In addition, an insurance carrier can rightfully deny claims for insurance coverage purchased in a fraudulent manner.

The Law

What exactly is the law?  Although some people learn best by reading exemplary cases, others fare better reading the actual statute.  According to NJSA 2C:21-4.6, a person is guilty of insurance fraud under the following conditions:

1. He or she knowingly makes, or causes to be made, a false, fictitious, fraudulent, or misleading statement of material fact in or omits a material fact from or causes a material fact to be omitted from any documentation related to an insurance policy
2. This includes bills, forms and any other paperwork/oral representations submitted in conjunction with an application for insurance or in connection with insurance claims.
3. Insurance fraud also includes misrepresentations under the “Unsatisfied Claim and Judgment Fund Law.” The purpose of this fund is to protect claimants who suffer a loss and find themselves without insurance through no fault of their own.

The Cost of Insurance Fraud

We have already provided you with some examples of insurance fraud in prior articles.  Consider the case of the gentleman with poor credit.   Since he could not qualify for a loan, he put his car in a friend’s name.  He was then forced to obtain automobile insurance coverage in the friend’s name.  Although he made the payments, he committed insurance fraud.  Not only has he risked criminal charges, but the insurance company is denying his accident claim.

Remember the father who decided not to mention that his teenaged son obtained his license?  He was well aware that his insurance policy would skyrocket.  Unfortunately, his son was involved in an automobile accident.  He too has exposed himself to jail time and his claim has been denied.

Not everyone who is involved in insurance fraud has malice intentions.  For many, it is an attempt to save money on premium costs.  For others, mistakes can be innocent ones.  We cannot emphasize the real price of insurance fraud.  Not only does it increase insurance rates for all consumers, but it also exposes individuals to criminal charges.  Jail time for insurance fraud is a reality.  Likewise, the cost of denied claims can be exorbitant.

Are you concerned that you may be unwittingly committing insurance fraud?  Contact us for legal advice. At the Law Office of Anthony Carbone, we have many years of experience dealing with insurance companies.  We would be happy to meet with you at no cost.