Providing false or inaccurate information when filing a claim can cause several problems for the plaintiff. A personal injury claim is considered a "fraud" when it tries to make an insurance company pay for damages that are exaggerated, nonexistent, or unrelated to an accident covered in the policy.
Depending on the type of fraud the person makes, they could face civil and criminal penalties, which add up to the expenses and emotional distress they may already have.
Contrary to popular belief, committing personal injury fraud isn't always intentional. Victims can make fraudulent insurance claims by failing to disclose relevant information, for example.
Experienced personal injury lawyers in Dallas TX can help victims go through their personal injury claims and obtain insurance coverage without committing fraud. Those interested in learning more about personal injury insurance fraud should keep reading.
How Common Are Fraudulent Personal Injury Claims?
Even though personal injury fraud isn't as common as other types of fraudulent activity, it still happens. Some people make fraudulent claims by adding "invisible damages" to their cases, such as back pain, whiplash, or tinnitus.
Insurance fraud, in general, can cause billions of losses for companies and further problems for the person behind the claim. This is why the law is so severe when it comes to these cases.
In any case, filing inflated claims can have serious ramifications, including criminal charges. Those who are unsure of whether they're filing their claim correctly should seek legal advice.
Common Types of Fraud
Personal injury fraud has two basic types to consider:
Soft Fraud
Soft insurance fraud is more common than its counterpart. It happens when someone experiences a personal injury but exaggerates their claims while filing a lawsuit. People do this to win more money out of their settlement.
Victims shouldn't claim damages beyond what they truly experienced. Otherwise, they would be committing soft fraud. This instance is also called "opportunistic fraud."
Hard Fraud
Hard insurance fraud is the category that can make a person face criminal charges. It happens when someone fabricates/stages an accident or fakes an injury on purpose. It's also called "premeditated fraud."
Common Methods People Use to Commit Fraud
Here are some common examples of fraudulent claims:
Providing false information in the insurance claim
Filing a "frivolous lawsuit"
Bribing a medical practitioner to provide false statements
Faking an injury to get worker's compensation or disability settlements
Failing to disclose important information about the case
Seeking compensation for injuries not related to the accident
Exaggerating the severity of the injury
What Are the Consequences of a Fraudulent Personal Injury Claim?
There are plenty of consequences that come from filing a fraudulent personal injury claim. Depending on the type of fraud, the person could experience one or two types of consequences:
Insurance Company Consequences
Insurance companies that notice someone tried to file a fraudulent claim could take the following actions:
Deny the Award: This is the least severe consequence someone can face. Here, the insurance company will simply not give any money to the victim.
Revoking the Policy: Insurance companies tend to check the state's "Department of Insurance" frequently. This is where fraudulent insurance claims get reported. Companies that notice that their policyholder committed fraud will probably cancel their policy. Most of the time, insurance companies add a clause about fraud in their policy documents, meaning they could cancel coverage without notice.
Revocation of Settlement Award: If the victim was already awarded money for their claim, the insurance company can request the money back. In the case the company can prove the person committed fraud, they would have to refund the full amount. Otherwise, the insurance company may file a lawsuit, which results in even more losses for the one who filed the fraudulent claim. Depending on the case, insurance companies could also recover punitive damages.
Criminal Consequences
In Texas (and most other states), a fraudulent insurance claim is punishable as a felony or misdemeanor. The type of punishment may vary depending on how severe the fraud was and where the person lives.
Misdemeanor: Usually, insurance fraud will get punished as a misdemeanor. It applies if the person exaggerates the claim or fails to disclose important information. In this case, the person could face fines, probation, and jail time for less than a year.
Felony: Felony convictions can result in severe fines and longer jail time. They apply when the person purposely fabricated or staged the incident that caused the injuries or property damage.
How to Avoid Filing a Fraudulent Personal Injury Insurance Claim
Filing a fraudulent personal injury claim will only cause further headaches for everyone involved in the case. Even if the victim didn't engage in fraud purposely, it can be hard for them to prove that they made an honest mistake when filing a claim.
In any case, victims must get assistance from a professional personal injury lawyer. These professionals have the experience necessary to file a claim the right way, avoiding potential mistakes that could lead to fraud charges and can explain what a personal injury demand letter is.
Besides hiring a professional lawyer, there are many things a person can do to protect themselves from getting charged with fraud. These include:
Calling the police right after the accident to get a report
Gathering as much evidence as possible surrounding the incident
Gathering witness statements (if possible)
Telling the truth to insurers
It's important to note that a person must have committed the crime intentionally to be convicted of fraud. If the victim made an honest mistake when filing their claim, they should hire a lawyer to get the best defense possible.
A professional personal injury lawyer may be able to fight their client's personal injury fraud charges successfully and help with questions like what is a release in a settlement?
Bottom Line
A fraudulent claim is something victims must avoid at all costs. Not only does it make the process more stressful for everyone, but it can also cause the plaintiff to face several legal consequences.
Navigating a personal injury claim can be stressful, which is why it's recommended to always get help from a legal professional. The experts at Schuerger Shunnarah Trial Attorneys are willing to "go to war" for their clients. They have the experience and training necessary to avoid fake injury claims and get the victim the compensation they deserve.