Colorado Revised Statute 18-5-211 makes it illegal to commit insurance fraud in Colorado. The statute outlines five ways a person can commit insurance fraud.
- Lying or withholding material information on an insurance application for the purpose of obtaining, modifying, or renewing an insurance policy;
- Presenting a claim with false or withheld information;
- Participating in or falsely reporting a car accident for the purpose of filing a false claim;
- Presenting a claim for payment for a loss that occurred outside the time period of coverage; and
- Lying or withholding material information during the claim investigation either in support of, or in opposition to, a claim.
It Isn’t a Crime to Make a Mistake
Each of these crimes requires an intent to commit fraud. In other words, if a person did not intend to defraud an insurance company and, rather, just made a mistake, the person did not commit insurance fraud.
While many insurance fraud schemes are complex, here is a simple example of what does and does not constitute insurance fraud: Susan is in a car accident. After the accident, a claims adjuster visits her car at the repair shop and writes an estimate to repair the damage. The adjuster includes repairing damage that was not due to the accident. The body shop repairs it according to the adjuster’s estimate. Susan was unaware of the adjuster’s mistake and did not report the damage as related to the accident. She did not commit insurance fraud.
However, had Susan reported to the adjuster that the previous damage to her car was actually due to the accident, she would have committed fraud.
The Harsh Penalties for Fraud Convictions
Lying about or withholding material information on an insurance application is a class one misdemeanor, punishable by a jail sentence of between six and eighteen months and a fine of up to $5,000. The other forms of insurance fraud listed are all class five felonies, punishable by a prison sentence of between one and three years and a fine of between $2,000 and $500,000.
In Colorado, insurance fraud is typically prosecuted by the Attorney General Office’s Insurance Fraud Unit. However, some of the larger jurisdictions investigate such crimes locally. Investigations can often include the Colorado Division of Insurance, the National Insurance Crime Bureau, and even the FBI all working in together with local authorities.
Common Defenses of Insurance Fraud Charges
A typical defense of an insurance fraud case involves examining the element of “intent:” Did the accused have the intent to defraud the insurance company out of money? This is the most crucial element to the crime and is often the hardest for law enforcement to prove. Intent is the reason that making a mistake on an application or when filing a claim does not constitute insurance fraud.
Abandoning a scheme to defraud an insurance company may also constitute a defense to insurance fraud.
You Need an Attorney Who Understands the Insurance Industry
Philip Shadwick has worked in the insurance arena for thirty years. He has worked in all phases of the insurance industry and has worked as an attorney outside of the industry. He has experience in both the civil and criminal areas of the law. If you have been accused of insurance fraud, you need a white collar crime defense attorney who not only understands the law, but also understands the insurance industry and its processes. Call The Bussey Law Firm, P.C., today for a consultation to discuss the charges you are facing.