Inflated insurance claims are a type of violation wherein the insured party submits exaggerated or false information to an insurance company. This is usually done intentionally, with the aim of obtaining a higher settlement award for a personal injury. While they can vary in form and content, an inflated insurance claim can involve:
- Exaggerated calculations for loss amounts (higher than what the actual loss amount is)
- False claims regarding policies
- Attempting to claim compensation for economic losses or injuries that didn’t actually occur
Inflated insurance claims can often constitute a form of insurance fraud, depending on the nature of the claim, as well state laws and individual coverage policies. They are very common for claims involving automobile accidents, slip and fall cases, and medical malpractice claims.
Some people may attempt to inflate an insurance claim because they don’t think that they’ll be caught, or they think that it won’t lead to any legal consequences. However, insurance fraud and inflation of an insurance claim are serious violations that can lead to legal consequences like:
- Criminal charges: A conviction for white collar crime can occur, especially if the false claim also involves tax fraud, misrepresentation, or other types of fraud. This is usually a misdemeanor charge, punishable by jail time of up to one year and some criminal fines. Repeat offenses will lead to stiffer penalties.
- Private civil lawsuit: It’s common for the insurer to sue the insured if they inflate an insurance claim. This will require the offender to compensate the other party for any economic losses caused by the false insurance claim. Other damages may result as well.
- Higher premiums: Inflating an insurance statement can actually lead to higher premiums in the long run for the insured. If the insurance company has to pay out higher costs, in the end they may raise prices for other consumers.
Lastly, the insurance company can also face criminal charges if they knowingly cooperate in a false insurance claim, or if they knowingly approve a client’s inflated insurance claim. For example, if the insured and the insurance company both knowingly falsify information when preparing for a lawsuit, they both can face heavy criminal consequences for their joint conduct.
Inflated insurance claims can cause problems for all the different parties involved in a claim. If you need to file an insurance claim, you may wish to hire an experienced lawyer to help you with the filing. Your insurance attorney can review your claim to ensure that you aren’t violating any laws or requirements. They can ensure that your insurance company is dealing with you in an honest way. Also, if you need to file a lawsuit in a court of law, your attorney will be able to represent and guide you throughout the process.