An insurance policy serves a vital purpose. Whether someone takes out a homeowner, auto insurance or business liability policy, the contract locks the provider into assuming financial responsibility for covered perils. That means the insurance company must pay a customer for any valid claims, provided the policyholder is not in breach. Fraud would assuredly be a violation and an illegal one. Washington laws govern insurance coverage, and some provisions punish those who commit fraud.
Understanding insurance fraud
Fraud refers to any attempt to use deception or illicit practices to cheat another party out of money or other assets. Someone who smashes their car with a baseball bat and claims another vehicle hit it on an insurance form would be committing an act of fraud.
Other examples of insurance fraud are somewhat more common. For example, a claimant could suffer a loss but may exaggerate the damage’s monetary amount or the loss’s extent. The goal involves getting more money from the claim than what they deserve. In short, that is a variation on outright theft.
Insurance fraud is serious; false claims drive up everyone’s insurance policy premiums. After all, the insurance companies must recover their losses somehow. Those who commit fraud may find law enforcement investigates such instances aggressively, and the penalties could be severe.
Dealing with charges of fraud
An insurance company could suspect fraud and start an internal investigation. The company might inform law enforcement of their findings, leading to a police inquiry and possible charges. Unfortunately, the accused might not be guilty of the crime. An effective criminal defense strategy could prove the defendant’s innocence.
Someone could make a mistake when filling out a claim form. Or, an overzealous investigator may see malfeasance where it doesn’t exist. Proving a lack of intent or illegal actions could lead to a preferable outcome for the defendant.