By Dallas and Collin County Criminal Defense Lawyer Jeremy Rosenthal
Insurance fraud is governed by Chapter 35 of the Texas Penal Code. It can be summed up as lying to an insurance company to attain benefits and/or coverage, but you should read the statute to clear up any questions you may have.
The statute makes several types of insurance fraud illegal. To be guilty of insurance fraud, one must intentionally or knowingly present false or misleading material information to the insurance company. An example of this might be that someone reports a car accident occurred — which never actually occurred to get insurance money.
Another way the crime is committed is to have instead the person who prepares or causes to be prepared the insurance claim be accountable for any fraudulent statements. An example of this is where someone goes to the dentist to have their teeth cleaned. Unknown to the patient, the dentist has his administrative assistant bill the insurance company for a root canal. In that instance, the dentist and his assistant are both likely guilty of the insurance fraud though the assistant might be shown more leniency. The patient would have no liability assuming they didn’t know about the scheme.
Yet another way the crime can be committed is when someone with intent to defraud or deceive receives a benefit from an insurance policy they know is the result of fraud. A good example of this would be where a plumber and a homeowner decide to split the money for a bogus insurance claim where the plumber unclogged a toilet and the homeowner and he have a handshake deal where they submit it as a busted pipe which destroyed the bottom floor of a house.
Now, if you ask the insurance company — virtually everything someone tells them about a claim they don’t want to pay is “fraud.” And, they’ll have the public think that despite raking in oodles of premiums and having one of out stoutest lobbies in Austin, insurance fraud is a wide-spread epidemic and that they, the insurance companies, are somehow victims. Please contain your laughter. The vast majority of insurance issues that get hashed out in court are done in civil, not criminal disputes.
Chapter 35 contains a lot of language which shows the degree of deceit has to be somewhat steep in order to trigger a crime because insurance claims are inherently subjective and the subject of bitter disputes. For example, there must be showing of intent to deceive as well as the ‘materialty’ or importance of the false statement to the over-all claim. Though some may disagree, blaming the other driver for the car accident probably isn’t going to land you in hot water for criminal insurance fraud assuming you have a good-faith belief for making such a claim.
Truthfully, insurance fraud prosecutions are somewhat rare. But they are serious charges. The charges can range from misdemeanors to felonies based on the dollar amount of the alleged fraud, and the charges would almost certainly qualify a crimes of moral turpitude which impair professional licensing and carry a terrible stigma.
*Jeremy Rosenthal is Board Certified in Criminal Law by the Texas Board of Legal Specialization and licensed by the Supreme Court of Texas. Nothing in this article is intended to be legal advice. For legal advice about any situation you should contact an attorney directly. Contacting the author through this blog does not constitute an attorney-client relationship and such communications are not subject to the attorney-client privilege.