What Are Car Insurance Frauds And How Are They Penalized

Now, you can easy get car insurance quote, you have access to a wide variety of car insurance options and you can choose wisely which one is best suited for your needs. However, not all would-be applicants have good intentions, and auto insurance fraud is becoming a very serious issue. Because fraud costs auto insurance companies billions of dollars every year, they are forced to increase rates in order to make up for those losses. And that only ends up hurting the wallets of all those other customers who have no fault for these acts of fraud. That being said, these are the penalties for auto insurance fraud, depending on the severity of the felony:

The majority of car insurance fraud convictions are misdemeanors. What a “misdemeanor” usually implies is a lie or an exaggeration on the insurance application. Fraudulent personal injury claims have been frequent in recent years.  A misdemeanor conviction for this kind of car insurance fraud can mean a fine, probation or even a jail term, although this will never be for more than 5 years and it will happen only in extreme cases. Depending on the gravity of the offense, a misdemeanor fine will be at most $15,000 – $30,000.

A felony car insurance fraud involves the intentional destruction of property for the purpose of collecting insurance money, made much worse if it results in injuries or loss of life. The penalties for felony convictions when it comes to car insurance fraud are, of course, much more severe than for misdemeanors. Probation is very unlikely, and anyone convicted will almost certainly serve time in jail with the term lasting between 5 and 10 years. If, however, the convicted can get away only with a fine, this can be as much as $150,000. Limits on jail terms and the exact amount for fines will vary between states.

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