What Is Personal Injury Fraud? – Definition and Potential Consequences
A person who files a fraudulent personal injury claim may face serious consequences, including fraud charges that could result in huge fines and even jail time.
Additionally, any individual engaging in personal injury fraud could be found liable for any money they received as compensation or the costs of investigating the case.
People should provide legitimate information when filing personal injury claims to avoid charges or civil and criminal penalties.
A claimant can be charged with fraud even if they are not lying but withholding information that they are legally required to disclose. Therefore, it is important to understand bodily injury vs personal injury and what personal injury fraud is and the potential consequences to avoid this outcome.
The Definition of Fraud in a Personal Injury Claim
The term "personal injury fraud" describes an act intended to convince an insurance company to compensate a person for an injury they did not sustain.
Personal injury fraud also occurs when the injury has been exaggerated or is not related to an accident covered by the policy.
If a person exaggerates the extent of the injuries or damages they sustained in a car accident, that could be considered fraud, for example.
It is also known as personal injury insurance fraud since the main objective of this act is to obtain insurance coverage for nonexistent, exaggerated, or fake injuries.
Types of Fraudulent Personal Injury Claims
There are two common types of fraudulent personal injury claims. These are:
Soft Insurance Fraud
This fraudulent personal injury claim involves exaggerating the severity of the injuries or damages. Also, this is the type of insurance fraud with the highest number of reports.
It is also known as "opportunistic" insurance fraud. Although victims should recover every dollar they need to cover expenses for their injuries, filing inflated claims that are beyond actual damages is considered fraud.
Hard Insurance Fraud
Since this type of personal injury insurance fraud involves faking or inventing a way to claim damages, it is also considered "premeditated."
Intentionally causing an accident and stating arson or theft of a vehicle may fall into this category.
Common Ways to Commit Personal Injury Fraud
The following examples illustrate common situations and contexts where personal injury fraud typically occurs:
When a person files a frivolous lawsuit against another party
If someone files a false insurance claim or intentionally provides inaccurate information
When someone commits fraud or lies while applying for healthcare
If someone exaggerates the extent of an injury
When a person seeks compensation for a previous injury that is not related to the accident covered by the insurance policy
If the claimant bribes a medical practitioner to give false information about the injury, treatment, or health condition
When an employee uses fake information about their injuries to pursue disability or workers' compensation
If the compensation a person is pursuing is greater than the losses incurred
Potential Civil and Criminal Penalties for a Fraudulent Personal Insurance Claim in Indianapolis, Indiana
A person who makes a fraudulent claim in an Indiana personal injury case could face several consequences, including the following:
The insurance company may deny a personal injury claim, which means it will not compensate claimants for associated injuries and losses if it is discovered to be fraudulent.
Getting an award denied by an insurance company is the least severe penalty for fraudulent insurance claims in most states.
Insurance Policy Cancellation
Insurance companies can also cancel insurance policies and no longer allow claimants to be their customers if they engage in personal injury fraud.
If a claimant is committing personal injury fraud, the insurer may cancel coverage without prior notice.
Additionally, companies are required to report these incidents to the Indiana Department of Insurance. Therefore, a person who files a fraudulent personal injury insurance claim could have difficulty obtaining coverage in the future.
Lawsuit Award or Settlement Revocation
Insurers may also seek reimbursement of the compensation awarded to claimants if they are found to have engaged in personal injury fraud.
Also, the insurance company can file a lawsuit against the claimant if they are unable to refund the full amount paid as compensation. Schuerger Shunnarah Trial Attorneys can explain what is a release in a settlement?
When the claimant engages in personal injury fraud, the insurance company may also recover covered losses due to the claim and investigation costs. If people cannot pay the sum, this company can request a lien or wage garnishment.
Criminal Penalties for a Fraudulent Personal Injury Claim in Indiana
Besides the civil consequences mentioned above, a person who engages in personal injury fraud in Indianapolis, Indiana, could face the following criminal penalties:
An Indiana resident could face penalties for a Class A misdemeanor if they lie on an insurance application. Potential consequences include a fine of up to $5,000 and up to one year in jail.
In Indiana, insurance fraud is considered a Level 6 felony. As such, it carries fines of up to $10,000 and prison terms of six months to 2.5 years.
However, insurance fraud can be considered a Level 5 felony in the following scenarios:
The claimant has a prior insurance fraud conviction
Economic damages or the value of property or services illegally obtained due to another fraud is at least $2,500
As a Level 5 felony, personal injury fraud carries fines of up to $10,000 and one to six years in jail.
How Can Victims Protect Themselves from Personal Injury Fraud Charges?
An injured person who plans to file a personal injury claim against someone else may consider the following recommendations to protect themselves against potential fraud charges:
Inform police officers about the accident that caused the injury
Collect witness testimonies and statements
Contact insurance companies and provide accurate information
Gather evidence to prove their claims
Contact an experienced personal injury lawyer
What Can a Personal Injury Lawyer Do in These Cases?
A person can only be found guilty of personal injury fraud if they committed this act intentionally.
However, claimants can prove that they made a genuine mistake when stating the accident's facts, thought the information they provided was true, and had no intent to lie or commit fraud.
In these cases, it is essential to get help from an experienced personal injury lawyer. Seasoned personal injury lawyers in Indianapolis IN can protect claimants' rights and ensure they receive fair compensation if they are wrongly accused of insurance fraud or a similar action.
Anyone needing guidance throughout this process can contact Schuerger Shunnarah Trial Attorneys and get assistance from one of our personal injury lawyers.