White collar crime appears to be on the rise in the United States. One specific type of white collar crime – insurance fraud – is especially commonplace in today’s society. While insurance fraud may seem like a victimless crime, it is not. The Coalition Against Insurance Fraud estimates that fraudulent insurance claims cost the country more than $80 billion each year. As a result, states like Illinois have taken legislative action to discourage insurance fraud. Lying to your insurance company to receive benefits can have serious civil and criminal consequences.
What is Insurance Fraud?
Insurance fraud is basically the act of lying to your insurance company to receive benefits that you would not otherwise be entitled to collect. Submitting a false claim in order to gain a benefit is an act of theft. You can face serious legal consequences when you take something that does not legally belong to you.
According to one student, the ten most common forms of insurance fraud involve:
- Stolen cars
- Car accidents
- Car damage
- Health insurance billing
- Unnecessary medical procedures
- Staged home fires
- Storm fraud
- Abandoned house fraud
- Fake death
- Renter’s insurance.
In each of these cases, a person would be guilty of insurance fraud for submitting a fraudulent claim to their insurer to recover benefits they were not entitled to. So, for example, it would be a crime to lie about the extent of damage to your house after a tornado or blizzard. If you submitted a false claim to your home insurance company you could face both civil and criminal consequences.
Criminal Consequences of Insurance Fraud in Illinois
In Illinois, it is a crime to commit insurance fraud. You can be charged with the crime of insurance fraud if you knowingly submit a false claim to an insurance company to deceive them into giving you property that you are not entitled to have. It is also a crime to attempt to deceive an insurance company into giving you property that you are not entitled to have.
Illinois also explicitly defines and prohibits health care fraud. You can be charged with health care benefits fraud if you knowingly deceive a health care provider into giving you health care benefits that you are not entitled to.
The criminal penalties for insurance fraud in Illinois will depend on the extent of the fraud. The greater the value of property (benefits) you received, the harsher the criminal sentence will be. Here is a breakdown of the criminal penalties for insurance fraud in Illinois:
- Fraud of > $300: Class A Misdemeanor. Maximum sentence of one year in jail and/or $2,500 fine.
- Fraud of $300 – $10,000: Class 3 Felony. Maximum sentence of five years in prison and/or $25,000 fine.
- Fraud of $10,000 – $100,000: Class 2 Felony. Maximum sentence of
- Fraud of < $100,000: Class 1 Felony. Maximum sentence of seven years in prison and/or $25,000 fine.
- Health care benefits fraud: Class A Misdemeanor.
The criminal charges you face may be aggravated if you commit insurance fraud at least three times within an 18-month period. Aggravated insurance fraud is always a felony offense.
Civil Liability for Insurance Fraud in Illinois
Insurance fraud has become such a serious problem that the Illinois criminal code actually contains a provision about civil damages. The Illinois criminal insurance fraud statute specifically states that a person who commits insurance fraud can be civilly liable for their actions. Specifically, the law permits a victim of insurance fraud (in most cases, an insurance company) to recover damages for
- Three times the amount of benefits received, or
- Two times the amount of benefits attempted to be received.
The victim of insurance fraud may recover whichever amount is greater. Insurance companies may also seek the reimbursement of reasonable attorney’s fees.
Fighting Accusations of Insurance Fraud
Lying to your insurance company to receive a benefit may seem like a harmless act. What’s the harm in exaggerating your injury or the damage to your car? A study by the Rand Institute for Civil Justice notes that these lies add up over time. Each year, insurance fraud adds between $13 billion and $18 billion to the country’s insurance tab. States like Illinois have enacted tough laws to deter and punish acts of insurance fraud.
Lying to your insurance company can result in jail time, criminal fines, and civil fines. This makes it important to speak with a qualified criminal defense attorney.