6 Consequences for Insurance Frauds Punishment
Insurance fraud is a serious matter and the punishments that go with it (should a person be caught) are also a serious matter. We don’t want anyone to have to go through these insurance frauds punishments, whether it be denied insurance claims or jail time, so we have compiled a list of details about punishments and consequences that can come as a result of insurance fraud.
We hope that you are not involved in insurance fraud (and never will be). But if you or someone you know is considering such a thing, we need to make sure that you know what the punishments will be – so that you can steer clear of such fraudulent practices. Read this cautionary blog post to learn more about the five common consequences of insurance frauds punishment:
1. Over 5K insurance fraud can come with a lengthy prison sentence
There are two different types of insurance fraud. While insurance fraud, in and of itself, is a clear crime, there are two degrees (or levels) of insurance fraud that can make all the difference when it comes to the seriousness of your punishment and penalty. (Warning: neither level of insurance frauds lets you get off easily.)
The first level is that of ‘under $5,000 insurance fraud’. The other is (as you’ve probably already guessed’, the ‘over $5,000 insurance fraud’. Both are serious and both are wrong, but they are not the same in severity when it comes to punishments and penalties.
If someone carries out insurance fraud to a sum over $5,000, they can be put in prison for up to fourteen years. That is fourteen years of your life wasted for not that much money (relatively speaking). No amount of money is worth fourteen years in prison so please think twice (or however many times it takes) before embarking on this dangerous path. But at the same time, don’t think that committing insurance fraud under $5,000 is going to give you an easy break either.
2. Under 5K insurance fraud also comes with severe penalties
When you are involved in an insurance fraud that comes in under $5,000, chances are good that you are still going to prison. This crime can come with a prison term of up to two years. That may not sound like much, especially compared to the punishment for insurance fraud over $5,000. But the prison sentence isn’t the only thing you have to worry about.
You also have to think about the fact that you would then have a criminal record. A criminal record is something that many people find hard to bounce back from – and you might as well. So it is far better to refrain from committing insurance fraud in the first place.
3. Smaller cases of insurance fraud come with their own punishments
While most (if not all) insurance fraud is punishable by a prison sentence, there are other punishments that are often used by insurance companies themselves. If they find out that you are attempting an insurance fraud, they will deny your claim (obviously). They will almost certainly raise your insurance rates or cancel your policy altogether.
In addition, insurance companies can inform other insurance providers that you are a high-risk potential client and you may have difficulty getting any kind of policy after that. This may not seem like a big deal (at least when compared with jail time) but it can seriously affect your life in the long run. It’s better to be safe than sorry, so don’t commit insurance fraud in the first place!
4. You may be sued for insurance claim
Nobody wants to deal with a massive, out of control lawsuit. But that may be exactly what you’ll have to do if you commit insurance fraud and the company finds out about it. They are perfectly within their rights to sue you for the fraud you committed.
In no time at all, you could find yourself stripped of all insurance and available monies. That’s the last thing you want to have happen to you, right? Insurance fraud isn’t worth the high stakes risks that are involved in undertaking such a thing. So stay on the right side of the law and stay clear of big, messy lawsuits.
5. Paying back the stolen money isn’t a guaranteed ‘get out of jail card’
You may think that by simply paying back the money that you stole during an insurance fraud will make all this unpleasantness go away. But the truth is that that won’t happen. Yes, you may get some leniency if you pay back some, most, or all of the money that you stole.
In the end, you will still have to face some form of punishment. Maybe it’s a jail sentence. Maybe it’s being blacklisted among insurance providers. We don’t know. But what we do know is that insurance fraud is wrong – and you should go anywhere near it.