The Dangers of Exaggerated Personal Injury Claims: PI Fraud Explained

Did you know that exaggerated personal injury claims are a type of insurance fraud? Exaggeration in this context is a felony and a sadly common problem in the wake of a car accident, often falling under the broader category of car accident insurance fraud.

In fact, an estimated $308.6 billion is lost to insurance fraud in the U.S. each year, which costs each consumer an estimated $900 annually due to increased premiums.

The most common perpetrators of insurance fraud are people who, according to one state, “overstate their insurance claims to make up for the deductible.” Consumers pay billions of dollars annually to cover exaggerations like slip and fall fraud, car accident scams, and fake personal injury claims.

Don’t let a falsely exaggerated personal injury claim blemish your driving record. Find legal protection through an attorney and educate yourself to avoid becoming a victim of an exaggerated claim.

What is Personal Injury Fraud?

Personal injury fraud is any statement or action designed to cause an insurance company to pay out a settlement claim for an injury that did not happen at all, was exaggerated, or was unrelated to any accident covered by the policy. Car accident fraud, a subset of car insurance fraud, is sadly common and can affect innocent drivers who never knew they’d been targeted.

Types of Exaggerated Personal Injury Claims

Here are some examples of overstating the amount of loss during an exaggerated personal injury claim:

• Exaggerating bodily injuries from an auto accident
• Saying someone was a passenger when they were not
• Inflating the value of items taken during a burglary or theft
• Inflating a physical damage claim from a minor fender bender
• Medical providers inflating billing or upcoding medical procedures

Engaging in any of these activities can result in a fraudulent personal injury claim, which carries serious legal consequences.

Soft Insurance Fraud

Soft insurance fraud is a form of personal injury insurance fraud where someone exaggerates the severity of their injuries. If they’re doing so with the goal of filing inflated claims, they’ve engaged in soft insurance fraud.

An injured individual should get every dollar required to successfully treat the injury and address their pain and suffering. However, if someone claims losses that go beyond actual damages, they’ve engaged in the most common type of insurance fraud. This is a crime.

Hard Insurance Fraud

Think of this as “premeditated” insurance fraud. Hard fraud is when someone invents a way to make an insurance claim. Car accident scammers often engage in hard insurance fraud by staging accidents or faking injuries. It begins with an intentional and planned-ahead action, such as:

• Intentionally causing an accident
• Faking an injury
• Claiming a pre-existing injury to get more money
• Staging a slip-and-fall
• Staging theft of a vehicle

How to Respond to an Exaggerated Personal Injury Claim

If you are a driver or property owner, you can be a victim of an exaggerated personal injury claim. Consulting with an experienced personal injury lawyer can help you navigate the complexities of such claims and protect your rights. Protect yourself by reporting accidents to the police as soon as you can. They will investigate what happened, identify all parties involved, and produce a police report.

Get contact information from everyone involved in an accident, including license plates and witness statements. Use your phone to take photos or video of the accident scene, including any injuries, what the accident looked like, injuries, and vehicle damage. Even in accidents that seem straightforward, the truth can be more complicated than it appears at first.

Report the accident to your insurance company as soon as you can and get your own attorney.

Ways to Report Personal Injury Fraud

According to the Texas Department of Insurance, people commit insurance fraud when “they lie or misrepresent facts for financial gain. Since companies divide the costs of claims among policyholders, fraudulent insurance claims drive premium costs up.”

Common car accident scams, such as staged accidents and exaggerated injuries, should be reported immediately to prevent further fraud. Therefore, if you suspect fraud, or think you’ve been a victim of insurance fraud, report it as soon as possible.

You can report fraud online or by calling the Help Line at 800-252-3439.

The California Department of Insurance has a Consumer Hotline to serve the needs of the public. If you have any information regarding fraudulent insurance activity, you may call the Consumer Hotline at (800) 927-4357.

Other states have different reporting systems, so you may need to look your own up for more information. If you do not live in Texas or California, search for your own state’s Department of Insurance for a fraud hotline.

Possible Guilty Parties in an Exaggerated Personal Injury Claim

Multiple parties can be involved in one exaggerated personal injury claim: In a car accident scam, multiple parties may be involved in orchestrating the fraud.

1. A medical provider might be involved in backing up any suspicious injury claims with medical records.
2. The alleged injury victim might have caused the accident or exaggerated their injury.
3. More people may claim they were passengers in the vehicle and suffered injuries, even though they were never there.

According to the state of California, fraud occurs when someone knowingly lies to obtain a benefit or advantage to which they are not otherwise entitled. According to the law, the crime of insurance fraud can be prosecuted when the suspect had the intent to defraud.

Insurance fraud is a “specific” intent crime. This means the prosecutor must prove that the person involved knowingly committed an act to defraud. Actual loss is not required as long as the suspect has committed an act and had the intent to commit the crime.

Penalties for Exaggerated Personal Injury Claims

The punishment for committing a fraudulent personal injury claim could include probation, fines, community service, restitution, confinement in county jail and/or state prison.

Most personal injury fraud cases are prosecuted under state criminal law. In California, for example, insurance fraud is a felony punishable by up to five years in prison and a $50,000 fine. In Florida, planning a car accident for a personal injury claim is a felony punishable by a minimum of two years in prison. A conviction may also include restitution for any illegal payouts.

Schedule a Free Consultation with a Personal Injury Attorney

Experts say approximately 20% of insurance claims are fraudulent, and that fraud is the second-most costly white-collar crime in America. If you’ve been a victim of this type of crime, take action by getting matched to an attorney who can help.

It can be stressful to handle a potentially fraudulent claim on your own. Having an experienced personal injury lawyer to navigate you through the process is important. LegalASAP has a network of hundreds of law firms established across the United States, helping you search for an attorney who truly understands your case.