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Fool’s Gold: Decoding California’s Insurance Fraud Laws and Penalties

On Behalf of | Feb 26, 2024 | Firm News


Welcome to the Law Office of Ari S. Lieberman, where we are dedicated to providing exceptional criminal defense representation in San Diego County and surrounding areas. Ari S. Lieberman started his career as a prosecutor at the San Diego County District Attorney’s Office where he was assigned to prosecute various types of insurance fraud crimes. As a result, Mr. Lieberman gained invaluable experience in this area of law.

In California, insurance fraud is a serious offense with severe consequences. In this blog post, we will explore the different types of insurance fraud laws in California, potential penalties, and how the Law Office of Ari S. Lieberman can help if you find yourself facing charges.

Understanding California’s Insurance Fraud Laws

Insurance fraud occurs when someone intentionally deceives an insurance company for financial gain. In California, depending on the type of insurance fraud, these offenses are prosecuted under various sections of the California Penal Code, Insurance Code, and Labor Code. Insurance fraud may be prosecuted under Penal Code sections 548, 549, and 550. Insurance fraud is also prosecuted under Insurance Code section 11880, subdivision (a). These laws encompass a wide range of fraudulent activities, such as filing false insurance claims, exaggerating injuries or damages, and staging accidents.

Types of Insurance Fraud

There are several types of insurance fraud that can occur in California, including:

1. Health Insurance Fraud: This involves submitting false or inflated claims to health insurance companies for medical services or treatments that were never provided. Health insurance fraud may also occur when an individual does not report an underlying or existing condition when applying for an insurance policy.

2. Auto Insurance Fraud: Common examples include staging car accidents, falsifying injury claims, or inflating repair costs to receive higher insurance payouts. Another common example is reporting an accident that occurred prior to the inception of the insurance policy.

3. Workers’ Compensation Fraud: There are various types of Workers’ Compensation fraud. Workers’ Compensation fraud can occur when an employee falsely claims to have been injured on the job in order to receive workers’ compensation benefits. Employers commit “premium fraud” by under reporting the number of employees or payroll in order to receive a reduced premium payment. Another related workers’ compensation law that is prosecuted is simply not having a workers’ compensation insurance policy. Pursuant to Labor Code section 3700.5, it is a misdemeanor in California to not maintain workers’ compensation insurance.

4. Property Insurance Fraud: This can involve intentionally damaging property or exaggerating the extent of damage in order to file a fraudulent insurance claim.

Penalties for Insurance Fraud

The penalties for insurance fraud in California vary depending on the specific circumstances of the case and the amount of money involved. Insurance Fraud can be charged as either a misdemeanor or felony. Felony charges carry much harsher penalties, including substantial fines and custodial sentences.

In almost all instances of insurance fraud, the defendant will be required to pay restitution. Restitution is the payment of any monetary loss that occurred as a result of the criminal offense. In insurance fraud cases, restitution will be paid to the insurance company for the amount paid out to the defendant.

Many defendants who have been charged or convicted of insurance fraud possess professional licenses. If the fraudulent conduct was substantially related to the qualifications, functions, or duties of the licensee, then the licensing authority may choose to proceed with disciplinary action against the license. This could result in the revocation or suspension of the professional license.


If you have been accused of insurance fraud in California, it is crucial to seek experienced legal representation as soon as possible. The Law Office of Ari S. Lieberman has a proven track record of successfully defending clients against insurance fraud charges. We will thoroughly investigate the allegations against you, build a strong defense strategy, and fight tirelessly to protect your rights and achieve the best possible outcome for your case.

Navigating California’s insurance fraud laws can be complex and overwhelming, but you don’t have to face it alone. At the Law Office of Ari S. Lieberman, we are here to provide you with the expert legal guidance and representation you need to effectively defend yourself against insurance fraud charges. Contact us today to schedule a confidential consultation and learn how we can help you protect your future.