Insurance Fraud is a Felony
Table of Contents
- Fraud Division Overview
- What is Insurance Fraud
- Insurance Fraud Costs Consumers
- Common Insurance Fraud Schemes
- Automobile Insurance Fraud
- Automobile Property
- Automobile Collisions
- Workers' Compensation Fraud
- Property, Life and Casualty Fraud
- Disability and Healthcare Fraud
- Billing of Medical Services
- Reporting Suspected Insurance Fraud
- Consumer Insurance Fraud Reporting Form (sample)
- Jurisdictional Map
- Fraud Division Regional Offices
- Talk to the Department of Insurance
Fraud Division Overview
- Automobile Insurance Fraud
- Workers’ Compensation Fraud
- Property, Life and Casualty Fraud (property, health, arson, life insurance fraud, and disaster relief)
- Disability and Healthcare Fraud
What is Insurance Fraud?
- The suspect had the intent to defraud. Insurance fraud is a “specific” intent crime. This means the prosecutor must prove that the person involved knowingly committed an act to defraud.
- An act is completed. Simply making a misrepresentation (written or oral) to an insurer with knowledge that is untrue is sufficient.
- The act and intent must come together. One without the other is not a crime.
- Actual loss is not needed as long as the suspect has committed an act and had the intent to commit the crime. No money necessarily has to be lost by a victim.
Insurance Fraud Costs Consumers
- Insurance fraud totals over $15 billion each year. This costs each resident an average of $500 a year. This results in higher premiums, higher taxes, and higher prices.″
- According to the National Insurance Crime Bureau (NICB), other than tax evasion, insurance fraud is the second most costly crime in the country.
- Insurance fraud has a direct effect on innocent, law-abiding citizens. Fraud perpetrators have staged automobile collisions resulting in loss of life, have driven companies out of business, and have performed inappropriate medical treatment on defenseless victims.
- Criminals often target vulnerable groups that include seniors, recent immigrants, and small businesses.″
- Many residents do not think about the personal, moral, and economic threat that insurance fraud poses to their everyday lives and their standard of living. This leads to the growing tolerance of insurance fraud.
If you are solicited to commit insurance fraud, STOP!
Insurance Fraud is a felony punishable by up to five years in state prison and a $50,000 fine.
Common Insurance Fraud Schemes
Automobile Insurance Fraud
Automobile Property
- Reporting parts of vehicles as damaged or lost when in fact they were not damaged or lost prior to the shop receiving the vehicle.
- Charging an excessive final cost as compared to the original estimate of damage.
- Listing charges for repairs on the billing statement that were not authorized.
- Billing for Original Equipment Manufacturer (OEM) parts, when after-market or salvaged parts were used.
- Billing for OEM parts when bondo is used to make repairs.
- Falsely reporting vehicles as stolen, burned or vandalized in order to collect insurance monies or obtain repairs for previous damage.
Automobile Collisions
- Sudden Stop - The driver of the vehicle in front of you stops suddenly for no reason, causing you to rear-end the vehicle.
- Swoop and Squat - A fast moving vehicle swoops in front of the vehicle in front of you, causing that vehicle to brake suddenly, causing you to collide into the "victim" vehicle. A third vehicle has also forced you to remain in your lane so that you cannot avoid the collision.
- Stuffed Passengers - Passengers who were not in the vehicle at the time of the collision.
- Right of Way Collision - An on-coming driver gives you the right of way and waits for you to enter the roadway, and then purposely causes a collision.
Workers Compensation Fraud
- An employee knowingly files a claim for an injury that did not occur on the job or in relationship to the job.
- An employee claims they are unable to do various activities that they can do.
- An employee receives total temporary disability benefits as a result of lying about outside employment, re-employment or their ability to work.
- A medical or legal provider bills for services not provided.
- A medical or legal provider regularly bills for more time than provided.
- An employer discourages an injured employee from filing a workers’ compensation claim.
- A company provides fraudulent information to the insurance carrier in order to reduce their workers’ compensation premiums.
Property, Life and Casualty Fraud
Disability and Healthcare Fraud
Billing of Medical Services
The most common types of fraud committed by dishonest providers include:
- Billing for services that were never rendered -- either by using genuine patient information, sometimes obtained through identity theft, to fabricate entire claims or by padding claims with charges for procedures or services that did not take place.
- Billing for more expensive services or procedures than were actually provided or performed, commonly known as “upcoding”.
- Performing medically unnecessary services solely for the purpose of generating insurance payments.
- Misrepresenting non-covered treatments as medically necessary covered treatments for purposes of obtaining insurance payments - widely seen in cosmetic-surgery schemes in which non-covered cosmetic procedures such as “nose jobs” are billed to insurance companies as medically necessary.
- Falsifying a patient’s diagnosis to justify tests, surgeries or other procedures that are not medically necessary.
- Unbundling - billing each step of a procedure as if it were a separate procedure.
- Billing a patient more than the co-pay amount for services that were pre-paid or paid in full by the benefit plan under the terms of a managed care contract.
- Accepting kickbacks for patient referrals.
- Waiving patient co-pays or deductibles and over-billing the insurance carrier or benefit plan.
Reporting Suspected Insurance Fraud
California Department of Insurance
Enforcement Branch Headquarters
Filing a Complaint of Suspected Insurance Fraud
Download a copy of the form (FD-1) to report suspected fraud. Please complete thoroughly with as much detail as possible.
Consumer Fraud Claims Form (sample)
Local Fraud Division Regional Offices Jurisdiction Map
Fraud Division Regional Offices
Notification of these types of fraud can be made in person or mailed to:
The California Department of Insurance
Post Office Box 277320
Fraud Division Intake Unit
Sacramento,CA 95827-7320
Regional Office Addresses:
Regional Office | Address | Counties Served |
---|---|---|
Benicia |
1100 Rose Drive, Suite 100 Benicia, CA 94510 (707) 751-2000 |
Alameda, Contra Costa, Del Norte, Humboldt, Lake, Marin, Mendocino, Napa, San Francisco, Solano, and Sonoma |
Fresno |
1780 East Bullard, Suite 101 Fresno, CA 93710 (559) 440-5900 |
Fresno, Inyo, Kern, Kings, Madera, Mariposa, Merced, San Luis Obispo, and Tulare |
Inland Empire |
9674 Archibald Avenue, Suite 100 Rancho Cucamonga, CA 91730 Phone: (909) 919-2200 |
Riverside and San Bernardino |
Orange |
333 South Anita Drive, Suite 450 Orange, CA 92868 Phone: (714) 712-7600 |
Orange |
Sacramento |
9342 Tech Center Drive, Suite 500 Sacramento, CA 95826 Phone: (916) 854-5700 |
Alpine, Amador, Butte, Calaveras, Colusa, El Dorado, Glenn, Lassen, Modoc, Mono, Nevada, Placer, Plumas, Sacramento, San Joaquin, Shasta, Sierra, Siskiyou, Stanislaus, Sutter, Tehama, Trinity, Tuolumne, Yolo, and Yuba |
San Diego |
10021 Willow Creek Road, Suite 100 San Diego, CA 92131 Phone: (858) 693-7100 |
Imperial and San Diego |
Silicon Valley |
18425 Technology Drive Morgan Hill, CA 95037 Phone: (408) 201-8800 |
Monterey, San Benito, San Mateo, Santa Clara, and Santa Cruz
|
Southern Los Angeles |
5999 East Slauson Avenue City of Commerce, CA 90040 Phone: (323) 278-5000 |
Southern Los Angeles County |
Valencia |
27200 Tourney Road, Suite 375 Valencia, CA 91355 Phone: (661) 253-7400 |
Northern Los Angeles County, Santa Barbara, and Ventura |
The California Department of Insurance has a Consumer Hotline to serve the needs of the public. If you have any information regarding fraudulent insurance activity, you may call the Consumer Hotline at 800-927- 4357. All suspected insurance fraud reported to the Consumer Hotline is forwarded to the Fraud Division.
It is important to know that notification of insurance fraud may be made anonymously. The Insurance Code states that no insurer, employees or agents of any insurer, shall be subject to civil liability for libel, slander or any other relevant cause of action by virtue of providing information, in good faith, concerning suspected insurance fraud to law enforcement, including the California Department of Insurance Fraud Division.
Talk to the Department of Insurance
Do you have a question, comment or concern? There are several ways to talk to us:
Call:
Call our Consumer Hotline at (800) 927-4357
Telecommunication Device for the Deaf dial (800) 482-4TTY
Telephone lines are open 8:00 AM to 5:00 PM Pacific Time, Monday through Friday, excluding holidays
Write:
California Department of Insurance
300 South Spring St., South Tower
Los Angeles, CA 90013
Visit:
Visit us in person on the 9th Floor at the address above.
Office Hours: Monday through Friday8:00 AM to 5:00 PM Pacific Time, excluding holidays.