What Happens After An Arrest On Auto Insurance Fraud Charges?

Under PC 548, PC 549 & PC 550

Automobile insurance fraud can be commited under 3 distinct California laws:

  • Penal Code 548 – Abandoning An Auto
  • Penal Code 549 – Referring or Soliciting Auto Insurance Fraud Business
  • Penal Code 550 – Fraudulent Claims

Automobile insurance fraud can be committed by policy holders or the insured as well as by healthcare providers, auto shop owners, attorneys and anyone else who aids and abets them.

Overview of Auto Insurance Fraud

Conduct that qualifies as auto insurance fraud includes:

  • Purposely damaging, concealing or abandoning your car to collect the insurance proceeds1.
  • Staging an accident with fabricated injuries and presenting a car accident personal injury claim for payment2.
  • A healthcare provider who falsifies medical records and presents a fraudulent bill for services to the auto insurance carrier under the claimant’s med-pay provision3.
  • Knowingly submitting a false claim for damages, theft or other losses regarding your car4.
  • Knowingly make an oral or written statement that contains false or misleading information as part of an insurance claim5.
  • A body shop owner or employee who offers a bribe or monetary inducement to insurance adjusters or agents to induce their policyholders to have their vehicles repaired at their shops6.
  • Presenting multiple claims for the same accident (California (Penal Code 550(a)(4) PC)).

Abandoning or Damaging an Auto – Penal Code 548

It is unlawful to deliberately abandon or damage your car to collect the loss from the insurer for the car.

You do not have to follow through on the act so long as there is evidence of your intent to deceive the insurer so that it suffers or would have suffered a loss7.

Proving The Crime

Proving that the damage to your car was not related to the claim can be done by an experienced appraiser or body shop expert who can determine when the damage occurred.

A violation of this section is a felony. You face:

Referring or Soliciting Auto Insurance Fraud Business — Penal Code 549

Auto body shops are in competition for business from insurers and sometimes will offer kickbacks to adjusters to get them to refer their insured’s cars to them for repairs.

An adjuster may also be guilty by offering to refer business in return for a fee.

What Evidence Do The Police Acquire?

Such schemes are often discovered by investigators working undercover by either offering bribes to auto shops or soliciting them from auto body shop owners or employees.

The commission of a crime under this code section is a wobbler offense.

If charged and convicted as a felony:

  • Formal probation
  • 16 months, 2 or 3 years in county jail11.
  • A fine up to $50,000 or double the fraud, whichever is greater12

Misdemeanor Penalties For Penal Code 549:

  • Informal probation
  • Up to one year in county jail
  • A fine up to $1000

If you are charged a second time under this code section, it is a straight felony.

Auto Insurance Fraud Under Penal Code 550

A number of false auto claims come under Penal Code 550.

  1. Making a fraudulent insurance claim for theft, destruction or conversion
  2. Intentionally causing an accident
  3. Making a false statement.

A Fraudulent Auto Insurance Claim for Theft, Destruction or Conversion – PC 550(a)(4)

You commit this offense if you:

  1. Fraudulently claim payment for a loss because of theft, vandalism, destruction or conversion or for the loss or theft of the vehicle’s contents
  2. With knowledge that the claim was false
  3. And with the intent to defraud the insurer when you presented the claim.

An example is having inflicted the damage yourself or it came from a previous accident and then claim it was from the present accident under which you are presenting the loss claim.

Another instance is providing receipts for items allegedly stolen from your car that were never in the vehicle.

How Does The Prosecutor Prove the Crime

The state can offer proof that the damage came from another source or could not have been caused by this accident because of the physics involved.

If you reported the car as stolen but investigators only found your fingerprints in the car, this may be persuasive evidence of fraud.

Presenting Multiple Claims—PC 550(a)(4)

You are committing fraud by making more than one claim for the same loss to different insurers or even the same one with intent to defraud the insurer.

Any violation under PC 550(a)(4) is a felony. If convicted, you face:

  • Formal probation
  • 2,3 or 5 years in county jail
  • A fine up to $50,000 or double the fraud, whichever is greater
Intentionally Causing an Accident—PC 550(a)(3)

Staging an accident is not that uncommon and can be difficult to detect.

The Elements for PC 550(a)(3) are:

  • Causing an accident or participating in one
  • With the knowledge that it is for the purpose of presenting a false or fraudulent claim
  • And with intent to defraud13.

You can be guilty under this code section even if you did not personally collect any insurance proceeds so long as you participated in it.

Proof of the Crime

Insurance adjusters are aware of the practice and are suspicious of many accidents that are not fraudulent. They do look for inconsistencies in statements from the persons involved and suspicious medical statements or reports that look contrived or rubber stamped.

Healthcare providers who are not part of the scam may report their suspicions as well. Prosecutors may also promise leniency or immunity to a participant who is suspected in the fraud if the person would offer testimony against others who were more actively involved.

Penalties For Penal Code 550 – Intentionally Causing An Accident:

  • Formal probation
  • 2, 3 or 5 years in county jail
  • A fine up to $50,000 or double the fraud, whichever is greater
  • An additional 2 years for each prior auto insurance fraud conviction
  • An additional 5 years if you have 2 prior convictions under PC 550(a)(3)
  • An additional 2 years for each person who suffers a serious bodily injury in an accident that you intentionally caused under this section
  • Possible additional 3 years or more if you personally inflicted great bodily injury on someone who was injured while you were intentionally causing an accident

—PC 550(b)(1)-(4)

You may commit fraud by any of the following:

  • Presenting an oral or written statement that is part of or that opposes a claim for an auto insurance benefit  or payment knowing that the statement was false or misleading concerning a material fact
  • Making an oral or written statement for the purpose of obtaining insurance in California when you actually reside elsewhere

What is the Proof you Violated PC 550(b)(1)-(4)?

A material fact is certainly asserting that you live in certain state or city while living elsewhere so as to obtain lower rates. An investigator need only visit the alleged residence to confirm that you are not living there or examine tax records to see which home or location was claimed as your residence.

An undercover investigator may also pose as an auto accident victim to an attorney’s office or health care provider while confessing that he is doing it for the money only and is not injured. If the attorney or healthcare provider goes along despite this knowledge, they are guilty of fraud.

Commission of a crime under this section of Penal Code 550 is a wobbler offense.

Felony Sentencing For Penal Code 550:

  • Formal probation
  • 2, 3 or 5 years in county jail
  • A fine up to $50,000 or double the fraud, whichever is greater

Misdemeanor Penalties For Penal Code 550 Include:

  • Informal probation
  • Up to one year in county jail
  • A fine up to $10,000

Legal Defenses

Lack Of Intent

A Defense For Knowingly making a statement that contains false or misleading information.

Insurance adjusters are naturally suspicious and will closely scrutinize injury claims where there is little property damage or the alleged injuries are soft tissue with the symptoms subjective and difficult to corroborate with diagnostic tests. Even a misstatement or misinterpretation of a key provision in a policy may lead to a charge of fraud.

For instance, you may live in California and Arizona and believe your residence is in California but you do not meet its residency requirements, or you neglected to advise your insurance adjuster when you moved.

You may also have not noticed prior damage to your car and assumed the present accident caused it and claimed it as such.

Lack Of Evidence

It is difficult to prove you abandoned your car or deliberately damaged it without credible and direct evidence from another person that contradicts your statements.

Expungement For Auto Insurance Fraud

Expungement is available under California Penal Code 1203.4 PC for criminal convictions where no state prison time is served. Any misdemeanor qualifies as do most auto insurance fraud convictions, even if it is a felony, since county jail time rather than time in state prison is imposed. You do face state prison if you have prior felony convictions for insurance fraud which would remove your eligibilty for an expungement

Check to see If your auto insurance fraud conviction can be expunged

  • Find Out if You Are Eligible To Have Your Record Expunged
  • Stop Worrying About Employer Background Checks
  • Stop Worrying About Landlord Background Checks

Related Offenses

Healthcare Fraud

In conjunction with an auto insurance claim, you may commit healthcare fraud by submitting bills for services not performed or which were performed by someone who was not licensed but are charged as if you, as a licensed physician, did so.

Fraud is also committed when certain procedures or services are billed at more expensive rates. Healthcare fraud are either misdemeanors if the fraud amount is $950 or less, or a wobbler offense if it is more than $950.

Arson-PC 451

If you violate Penal Code 451 pc – California’s arson law in the context of auto insurance fraud by deliberate burning of your motor vehicle for the purposes of collecting the insurance proceeds for your loss.

This is a felony and you face

  • 16 months, 2 or 3 years in state prison
  • A fine up to $50,000 or double the amount of the fraud, whichever is greater.

What You Should Do Now

If you are serious about defending your charges against auto insurance fraud contact us for a free confidential 30 minute consultation with an attorney14 at 818-351-9555.

We may be able to intervene before charges are even filed.

Get Legal Help

Request A Free Consultation 818-351-9555 


  1. California Penal Code 548 PC []
  2. California Penal Code 550(a)(3) PC []
  3. California Penal Code 550 PC []
  4. California Penal Code 550 PC []
  5. California Penal Code 550 PC []
  6. California Penal Code 551 []
  7. Intent to Defraud. People v. Pugh (2002) 104 Cal.App.4th 66, 72 [127 Cal.Rptr.2d 770]; People v. Gaul-Alexander (1995) 32 Cal.App.4th 735, 745 [38 Cal.Rptr.2d 176]. []
  8. California Penal Code 548(a) – Every person who willfully injures, destroys, secretes, abandons, or disposes of any property which at the time is insured against loss or damage by theft, or embezzlement, or any casualty with intent to defraud or prejudice the insurer, whether the property is the property or in the possession of that person or any other person, is punishable by imprisonment pursuant to subdivision (h) of Section 1170 for two, three, or five years and by a fine not exceeding fifty thousand dollars ($50, 000). []
  9. See California Penal Code 548(a). []
  10. California Penal Code 548(b) – Any person who violates subdivision (a) and who has a prior conviction of the offense set forth in that subdivision, in Section 550 of this code, or in former Section 556 or former Section 1871.1 of the Insurance Code, shall receive a two-year enhancement for each prior conviction in addition to the sentence provided under subdivision (a).  The existence of any fact which would subject a person to a penalty enhancement shall be alleged in the information or indictment and either admitted by the defendant in open court, or found to be true by the jury trying the issue of guilt or by the court where guilt is established by plea of guilty or nolo contendere or by trial by the court sitting without a jury. []
  11. California Penal Code 549 – Any firm, corporation, partnership, or association, or any person acting in his or her individual capacity, or in his or her capacity as a public or private employee, who solicits, accepts, or refers any business to or from any individual or entity with the knowledge that, or with reckless disregard for whether, the individual or entity for or from whom the solicitation or referral is made, or the individual or entity who is solicited or referred, intends to violate Section 550 of this code or Section 1871.4 of the Insurance Code is guilty of a crime, punishable upon a first conviction by imprisonment in the county jail for not more than one year or by imprisonment pursuant to subdivision (h) of Section 1170 for 16 months, two years, or three years, or by a fine not exceeding fifty thousand dollars ($50,000) or double the amount of the fraud, whichever is greater, or by both that imprisonment and fine.  A second or subsequent conviction is punishable by imprisonment pursuant to subdivision (h) of Section 1170 or by that imprisonment and a fine of fifty thousand dollars ($50,000).  Restitution shall be ordered, including restitution for any medical evaluation or treatment services obtained or provided.  The court shall determine the amount of restitution and the person or persons to whom the restitution shall be paid. []
  12. See California Penal Code 549 []
  13. Intent to Defraud Element of Offense. People v. Scofield (1971) 17 Cal.App.3d 1018, 1025–1026 [95 Cal.Rptr. 405]; People v. Benson (1962) 206 Cal.App.2d 519, 529 [23 Cal.Rptr. 908], overruled on other grounds in People v. Perez (1965) 62 Cal.2d 769, 776, fn. 2 [44 Cal.Rptr. 326, 401 P.2d 934] []
  14. Our California auto insurance fraud defense attorney’s practice law in the following jurisdictions. Santa Clarita Valley, Antelope Valley, San Fernando Valley, San Gabriel Valley, Southern California, Los Angeles County, Santa Monica, Hollywood, Glendale, Sherman Oaks, Encino, Studio City, Burbank, Van Nuys, Chatsworth, San Fernando, Santa Clarita, Valencia, Palmdale, Lancaster, Pasadena, Alhambra, Malibu, Ventura County, Santa Barbara County, Orange County, San Bernadino County []

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