Types of Insurance Fraud
Insurance fraud is a dishonest act designed to obtain a benefit, advantage, or money to which the claimant is not entitled. Surprisingly, insurance companies assert that most claims are fraudulent or, at least, exaggerated. This is, however, unlikely, as most people are law abiding and merely want to be compensated fairly. Insurance companies categorize fraudulent claims as “soft fraud” or “hard fraud.” Pursuant to Massachusetts G.L. c. 266 §111A, insurance fraud is punishable by imprisonment for 5 or less years in prison or from 6 months to 2 ½ years in jail, or a fine of $500-$10,000, or both.
If you or a loved one has been accused of insurance fraud, call us at 617-492-0055 to schedule an in-office consultation with Kevin J. Mahoney. As both a prosecutor and lawyer at a large Boston insurance defense firm, Mr. Mahoney gained invaluable insights into the prosecution of individuals for insurance fraud. Let him put that experience to work for you.
Soft & Hard Fraud
“Soft” fraud occurs when the claimant has suffered damages, but misrepresents the extent of the loss to increase his recovery under the insurance policy. A claimant commits “hard” fraud by deliberately manufacturing a situation to enable him to file an insurance claim. Staging a car accident, for example, would constitute “hard” fraud. To recover under a life insurance, some claimants have gone as far as faking their own death. After the family of the “victim” claims the life insurance, a portion or all is sent to the supposed dead person.
Health Insurance Fraud
An individual health care insurance subscriber commits health care insurance fraud by lending his insurance card to a family member or friend who requires medical attention, allowing him to access health care to which he is not entitled. Healthcare providers commit insurance fraud by billing insurance companies for more expensive procedures than were actually performed or by substituting covered procedures for the non-covered procedures actually performed, thereby allowing the healthcare provider to bill the insurance companies under the patients’ insurance policies. Health care providers may also double bill insurance companies for a procedure by re-billing it as different procedure, or by performing unnecessary procedures.
Homeowner Insurance Fraud
Homeowners have engaged in “disaster fraud” schemes. In this type of fraud, homeowners exaggerate or invent false claims, often falsely attributing damage to the home to a storm, such as a hurricane, to recover under a home insurance policy. Where a home requires legitimate repairs, a homeowner, together with a contractor, commit insurance fraud by conspiring to inflate the cost of the repairs, either to divide the proceeds or to satisfy a deductible. Some homeowners falsely claim that expensive items were stolen from the home during a burglary or exaggerate the value of the items stolen.
Automobile Insurance Fraud
Automobile insurance fraud can occur in many ways. Damages to a car may be exaggerated, or totally falsified. One of the most common car insurance fraud schemes is to file false reports for a stolen vehicle, especially where driver fled the scene of an accident. Registering a car in a place where you do not live or listing someone other than the primary driver to lower a premium may constitute auto fraud. Many individuals have staged auto accidents to file false personal injury claims. The conspirators, sometimes including unethical physicians and chiropractors, all profit from the insurance awards. If someone approaches you to participate in one of these stunts, politely decline. Although it may be tempting to recover money from an insurance company, it is not worth the risk of injury, death, or criminal prosecution.
Under Massachusetts G.L. c. 266 §111B automobile insurance fraud is punishable by imprisonment in the state prison for not more than 5 years or by imprisonment in the house of correction for not less than 6 months nor more than 2 1/2 years or by a fine of not less than $1,000 nor more than $10,000, or by both such fine and imprisonment.
Insurance Fraud by Insurance Companies
Insurance companies themselves may also commit insurance fraud by purposely deleting claims from their system, denying coverage for things covered by the policy, or underpaying claims.
Contact a Cambridge Criminal Defense Lawyer
If you have been accused of insurance fraud, call Kevin J. Mahoney, a Massachusetts attorney with more than 25 years of experience. We would be happy to schedule a free in-office consultation for you with Attorney Mahoney.